The impact of electricity prices on sectoral output in South Africa.
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Date
2017-03-26
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University if Fort Hare
Abstract
The aim of this research was to investigate the impact of electricity prices on sectoral output in South Africa from 1994 to 2015, using the three basic panel data estimators. The contribution of this study is unique in three aspects. First, it explicitly tests for the impact of electricity prices on sectoral output. Secondly, the research uses the panel data analysis which allows for control of unobserved heterogeneity and variables in the model. More so, the study shows that, besides electricity prices, there are other factors which affect sectoral output in South Africa. The research employed the Hausman test to identify the fixed effect as the appropriate estimator to use among the three estimators (pooled, fixed and random effect). More so, the feasible generalised least of squares (FGLS) and Driscroll Kraay (SCC) estimators were employed to control for heteroscedasticity, autocorrelation and cross-sectional dependence of the model of the study. The Hausman test results indicate the fixed effect as the appropriate estimator which allows cross-sectional differences. Therefore, the seemingly unrelated regression (SUR) model was employed to analyse output response to electricity price changes at sectoral level. Electricity prices were found to be statistically significant to explain the sectoral output movements in South Africa.
Description
Masters Thesis
Keywords
SOCIAL SCIENCES::Business and economics
Citation
Gonese,D.The impact of electricity prices on sectoral output in South Africa.Alice.University of Fort Hare.