Publication Date
10-2018
Abstract
Links between electricity consumption and economic growth are fairly well documented for national economies, but less so for urban economies. The analysis of such relationships at the sub-national level of aggregation can potentially offer a useful complement to national-level research. This study examines the electricity-growth nexus in El Paso, Texas, while also considering the roles of capital stocks and employment. Testing suggests the presence of cointegrating relationships and a vector error correction model is estimated. Granger causality tests reveal the absence of causality between electricity consumption and personal income, implying that energy conservation efforts will have a neutral effect on economic growth. Furthermore, the results indicate that causality runs from the capital stock and employment to both personal income and electricity consumption. This echoes previous research regarding the importance of accounting for capital and labour factors of production in studies of aggregate electricity utilization and economic performance. The methodology used in this analysis to develop a broad synthetic measure of the urban capital stock, including various categories of public infrastructure, could be applied to other regions and urban economies.
Comments
Technical Report TX18-2
Thomas M. Fullerton, Jr. and Adam G. Walke, 2018, Electricity Consumption and Economic Growth in El Paso: 1976-2015, Technical Report TX18-2, University of Texas at El Paso Border Region Modeling Project.
A revised version of this study is forthcoming in Applied Economics.