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The Impact of Regulations, Energy Prices and Economic Activity on the India’s Electric Power Consumption: A Kalman Filter Application

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Advances in Managing Energy and Climate Risks

Part of the book series: Lecture Notes in Energy ((LNEN,volume 82))

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Abstract

This study presents an analysis of the time-varying GDP, FDI, exports and energy price elasticities of electric power consumption in India over the period 1978–2015, using the Kalman filter approach. The results show that GDP and the energy price are two of the main drivers of electric power consumption in India, while FDI and exports are found to play a less significant role since they are monopoly-driven and relatively low when compared to international standards. These findings imply that increases in energy prices in India might have a significant impact on electric power consumption in the short- and long-run. Furthermore, several changes in FDI and exports seem to have affected the sensitivity of electric power consumption during the period prior to regulations, which made individuals, businesses, and agencies more sensitive to energy costs. On the other hand, the period after regulation has been characterized by more stable and declining sensitivity of electric power consumption. Therefore, factors such as regulations and changes in the country’s economic activities appear to have affected GDP, FDI, exports and energy price elasticities of electric power consumption in India.

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Notes

  1. 1.

    World Development Indicators (World Bank 2016).

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Authors and Affiliations

  1. Assistant Professor, Department of Economics and Quantitative Methods, Higher Institute of Finance and Taxation of Sousse, University of Sousse, Sousse, Tunisia

    Sahbi Farhani

  2. QUARG UR17ES26, ESCT, Campus University of Manouba, 2010, Manouba, Tunisia

    Sahbi Farhani

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  1. Sahbi Farhani
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Correspondence to Sahbi Farhani .

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Editors and Affiliations

  1. CEMOTEV, UVSQ, Paris-Saclay, Guyancourt, France

    Stéphane Goutte

  2. CRECC, Paris School of Business, Paris, France

    Khaled Guesmi

  3. CRECC, Paris School of Business, PARIS, France

    Raphaël Homayoun Boroumand

  4. CRECC, Paris School of Business, Paris, France

    Thomas Porcher

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Farhani, S. (2021). The Impact of Regulations, Energy Prices and Economic Activity on the India’s Electric Power Consumption: A Kalman Filter Application. In: Goutte, S., Guesmi, K., Boroumand, R.H., Porcher, T. (eds) Advances in Managing Energy and Climate Risks. Lecture Notes in Energy, vol 82. Springer, Cham. https://doi.org/10.1007/978-3-030-71403-1_4

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  • DOI: https://doi.org/10.1007/978-3-030-71403-1_4

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