Assessment of the Effects of Electricity consumption on the Economy using Granger Causality: Zambia Case

Abstract

Electricity consumption in developing countries such as Zambia continues to grow as the economy grows. As a result, it is important to study how the rate of electricity consumption affects the economy of the a country. For this study, the economic variables that were used are the gross Domestic Product and the Consumer Price index. The results from this study are that there is a unidirectional relationship between electricity Granger causes the consumer price index. The study also showed that there is causal relationship between electricity and GDP and that there was no causal relationship between electricity consumption and the consumer Price Index.

Electricity consumption in developing countries such as Zambia continues to grow as the economy grows. As a result, it is important to study how the rate of electricity consumption affects the economy of the a country. For this study, the economic variables that were used are the gross Domestic Product and the Consumer Price index. The results from this study are that there is a unidirectional relationship between electricity Granger causes the consumer price index. The study also showed that there is causal relationship between electricity and GDP and that there was no causal relationship between electricity consumption and the consumer Price Index.