Econometric modeling of electricity consumption in post-war Lebanon

This paper applies econometric models to investigate determinants of electr ical energy consumption in post-war Lebanon. The impact of the Gross Domest ic Product (GDP), proxied by total imports (TI), and degree days (DD) on el ectricity consumption is investigated over different time spans covering th e period from 1993 to 1997. The time spans are chosen according to the rati oning level of electricity supply. For the 1993-1994 time span, TI is found to be a significant determinant of energy consumption, whereas, DD has a n egative correlation. This inconsistency might be attributed to an extensive rationing policy followed during this period. For the 1995-1997 time span which includes reduced rationing period (1995), all electrical energy consu mption determinants are found to be significant at the 5% significance leve l. Analysis results for the rationing free 1996-1997 time span also show th e significance of TI and DD at the 5% level. Furthermore, cointegration ana lysis for the 1995-1997 and 1996-1997 subsets reveals the existence of a lo ng-run relationship between all variables. Ln addition, error correction mo dels for both subsets are developed to predict short-run dynamics. Finally, statistical performance measures such as mean square error, mean average d eviation and mean average percentage error are presented for all models. (C ) 2000 Elsevier Science B.V. All rights reserved. JEL classifications: C51; Q41.