
Consumption Dynamics: Electricity Demand, Unemployment, and Inflation in Türkiye
Chapter from the book:
Ayyıldız,
F.
V.
(ed.)
2025.
Energy Economics Studies 1.
Synopsis
This study investigates the relationship between per capita residential electricity consumption and changes in unemployment and inflation in Türkiye using panel data analysis covering the period from 2007 to 2021 at the NUTS-2 regional level. The analysis is based on data obtained from the Turkish Statistical Institute and employs the Panel ARDL method. Short-term findings reveal that increases in the number of unemployed individuals and the inflation rate reduce per capita electricity (kW) consumption, with these effects being statistically significant. According to the error correction model used to assess the long-term relationship, the rise in the number of unemployed individuals continues to reduce electricity consumption, while inflation does not have a statistically significant long-term effect. These results indicate that the impact of economic indicators on electricity consumption may vary depending on the time dimension. Notably, the increase in unemployment is found to be a factor that suppresses electricity consumption in both the short and long run. This study offers a unique contribution to the energy economics literature by highlighting the influence of macroeconomic variables on regional energy consumption.