Determinants Of Electricity Consumption Based On The Nuts 2 Regions Of Turkey: A Panel Data Approach

Abstract

Previous studies have focused on the relationship in recent years between electricity consumption and socio-economic indicators, but little attention has been paid to regional differences in Turkey. This study determines the electricity consumption indicators of Turkey based on the Nomenclature of Territorial Units for Statistics (NUTS 2) regions during 2004-2011. To achieve this objective, panel data regression models, including socioeconomic indicators (gross value added, and import and export amounts) were developed. The study represents the first instance of regional knowledge for electricity consumption using the panel data approach. The empirical results show that electricity consumption for the NUTS 2 regions can be modelled using fixed effects models with standard errors obtained by the White estimator. The study reveals that regional development leads to increases in electricity consumption. Furthermore, electricity demand has grown impressively in line with regional economic developments in Turkey.