The study of causal relationships between electricity consumption and economic variables in Malaysia / Fazila Mohd Bani

This study focuses on the causal relationships between electricity consumption and economic variables in Malaysia economy. The variables used in this study are electricity consumption, gross domestic product (GDP), inflation rate, interest rate and per capita income. For this electricity consumption, the data will be collected from the net income of Tenaga National Berhad (TNB) and economic variables are using Malaysia economy data. This study will be using data from year 1992 until year 2006, in the yearly basis. This study used granger causality as their methodology to find the causal relationships between all variables. The results for this study was (1) There is uni-directional causality between electricity consumption and gross domestic product in Malaysia, (2) there is no causality relationship between electricity consumption and inflation rate in Malaysia, this means both variables are no affecting each other, (3) there is a uni-directional causality between interest rate and electricity consumption in Malaysia and lastly there is bidirectional causality between electricity consumption and per capita income.