GMM Approach to Residential Electricity Consumption in Indonesia

Abstract

This study reinvestigates the effects of socioeconomic factors on residential electricity consumption in 33 provinces of Indonesia during 2014–2020. We estimate two dynamic panel models of electricity demand at two levels, namely, the household and aggregate residential sectors. The gross regional domestic product per capita, unlike tariffs, significantly impacts consumption. The population size and electrification ratio also positively impact aggregate demand, suggesting the effectiveness of policy related to electricity access.