Elasticity of Demand for Electricity in Kenya From Time Series Data
Abstract
The Kenya Vision 2030 identifies electricity as a development enabler. Electricity plays a key
role in development. It facilitates technological advancements therefore enhancing gains
in productivity. Generally, electricity improves social advancement and attains faster
economic growth. However the demand for electricity exceeds the supply. The study
investigates the determinants of demand for electricity and their current elasticities using
secondary annual time series data from 1971 to 2012. The study employed OLS and the
Error Correction Model in data analysis. The results indicated that in the short run
industrial production and kerosene prices were key factors that determine demand for
electricity. The government therefore should strive to improve efficiency through
modernizing industrial technology. The government should also increase production of
electricity to match the industrial growth.
Citation
Degree of Masters of Arts in Economics,Publisher
University of Nairobi, School of Economics,