Abstraction

In this paper we examine the factor that consequence the electricity ingestion. Electricity ingestions ( EC ) need to be study in order to avoid the electricity deficit that on occasion hampered its economic system growing in the hereafter because many survey find that addition in GDP will take increase the electricity ingestion and Malaysia as the state that right now under development to 2020 demand to cognize their EC therefore they would n’t hold negative consequence during 2020 and sustainability will be control and policy can set up. The factor consist of GDP, population, oil monetary value as placeholder of electricity monetary value and structural alteration in economic system.The informations collected from 1980-2009 and utilizing the survey Ordinary Least Square ( OLS ) and unit root trial.

Keyword: Electricity ingestion, GDP, OLS, unit root trial,

Introduction

Malaysia is one of the state that under development. In order to accomplish to be are developing state their demand concern about any factor that can impact them in the hereafter. Malayan population has been increasing and necessitate to be achieved to 75 million in 2020. Now a twenty-four hours Malaysia population was merely 25 million. Berhad ( TNB ) , supplies power to Peninsular Malaysia, while in East Malaysia, the Sabah Electricity Sdn Bhd ( SESB ) and the Sarawak Electricity Supply Corporation ( SESCO ) provide power to the States of Sabah and Sarawak severally

Aim of this survey is to cognize the relationship electricity ingestion with factors that can impact it. The variable of this survey was GDP, population, oil monetary value, figure of houses and construction alteration in economic system. How this all variable can impact electricity ingestion can be determine after we regress it utilizing Ordinary Least Square ( OLS ) testing.

Electricity ingestion in Malaysia recoded as the 2nd highest among ASEAN members ( Tang, 2008 ) EC in Malaysia have been increase during 1980-2009. ( Hussain and Nur salwati, 2011 ) in survey of Measuring the Elasticity of Electricity Consumption for Rural and Urban Areas in Malaysia said the chief causes for increasing in electricity ingestion was development of conveyance sectors such as the railroad system, peculiarly the light rail theodolite in Kelang Valley and inter-city commuter train service and enormous development of Information Communication Technology ( ICT )

Gross Domestic Product

GDP is the factor that most of import to find the EC in this survey. Standard of life have been consequence by economic growing and this will take to set uping EC besides. This survey should be hold positive relationship and important between GDP and EC.

Population

Population and EC expected have strong relationship. Increasing in population will take people will more and more utilizing the electricity.

Oil Monetary value

Because of no information available for electricity monetary value, this survey utilizing oil monetary value as placeholder. In order to bring forth the electricity, oil is needed to bring forth it. Oil monetary value and EC expected to hold negative relationship.

Structures Change in Economy

The growing of heavy industry the chief subscriber of electricity ingestion growing. In instances of Malaysia, fabrication activity contributed to growing in electricity ingestion because in this state fabrication is one of the most of import industry utilizing the electricity. This survey will utilize fabrication informations to see whether it ‘s this industry contribute to EC. EC expected have positive relationship with this construction alteration in Malaysia.

LITERITURE REVIEW

In the last 3 decennaries, because of the enhance of life criterions and the development of developing states doing the electricity ingestion increasing many survey and analysis have been done to analyze the relationship and factor that make EC increasing.

Ranjan and Jain analyzed the impact of population and conditions sensitive parametric quantity on the electricity ingestion in Delhi during the period 1984-1993. They developed different multiple additive arrested development theoretical accounts for the assorted seasons. The variable

Harmonizing to Bo Q. Lin in the survey of electricity demand in the people ‘s Republic China he develop a long tally electricity demand to analyse the chief factor that can consequence electricity demand in PRC this survey utilizing unit root trial and carbon monoxide integrating theoretical account The consequence was The there exists a stable long-term relationship among the variables in the theoretical account over the sample period. As expected, the relationship among variables is more stable

and important after the PRC.

Silk and Joutz ( 1997 ) survey consequence was electricity ingestion is non sensitive to the alteration in its ain monetary value, income, every bit good as monetary value of replacement.

Halicioglo ( 2007 ) studied the snap of electricity demand in Turkey for the 1968-2005 periods and found that the income and monetary value snap in the long tally are greater than income and monetary value snap in the short tally. It showed that the degree of sensitiveness has increased in the long tally due to population ‘s ability to react to the policy alterations and the alterations can be seen in the long tally. By and large, it was in line with the theory of snap where the short tally snap is expected to be lower than the long tally snap.

Akinlo ( 2009 ) investigates the causality relationship between energy ingestion and economic growing for Nigeria. The consequences of our appraisal show that existent gross domestic merchandise

( rGDP ) and electricity ingestion ( ele ) are co incorporate and there is merely unidirectional Granger causality running from electricity ingestion ( ele ) to ( rGDP ) .

Kraft and Kraft ( 1978 ) , utilizing causality trial between electricity ingestion and GNP for the USA, and the consequence of a unidirectional causality running from GNP to energy ingestion.

Altinay and Karagol ( 2005 ) this paper study the causal relationship between electricity ingestion and existent. Both of the series were found to be a stationary. Both have strong grounds for unidirectional causality running from the electricity ingestion to the income. This implies that the supply of electricity is significantly of import to run into the turning electricity ingestion.

Seung-Hoon Yoo ( 2005 ) This paper study the short- and long-term causality issues between electricity ingestion and economic growing in Korea by utilizing the co-integration and error-correction theoretical accounts. The consequences show that there exists bi-directional causality between electricity ingestion and economic growing. This means that an addition in electricity ingestion straight affects economic growing and that economic growing besides stimulates farther electricity ingestion.

DATA AND METHODOLOGY

Research and Data Variable

This subdivision described briefly about the statistical technique applied to analyse the information collected. This he-man collected informations for the annual informations 1980-2009. The variable for this survey was electricity ingestion ( EC ) , GDP, population ( POP ) , collected from Department of Statistic Malaysia ( DSOM ) .Data on oil monetary value ( OP ) as proxcy for monetary value of electricity causes of there is no information available. Data structural alteration in economic system ( SCiE ) whereby fabricating aindustry is one of the bigger part in Malaysia and it will divided foremost with GDP.

a ) Unit Root Test

The ADF trial is selected and it is trial for a unit root which is more stationary whether in the degree, first difference, or 2nd difference of the series. In add-on, EViews reports the critical values at the 1 % , 5 % and 10 % degrees.

Hypothesis

Holmium: ? = 0 ( Data has unit root trial )

H1: ? ? 0 ( Data has no unit root trial )

FINDINGS The arrested development is done utilizing the Unit Root trial. All of the information reasoning backward. In order to do the variable important, the 1st and 2nd differences are used while arrested development is made in the Unit Root Test as shown below:

B ) Unit Root Test tabular array

Variables

ADF-STATISTICS

CRITICAL VALUES

Order OF INTEGRATION

lnEC

0.001

1 % level-4.339330

5 % degree — 3.587527

10 % degree — 3.229230

Stationary at 2st difference

lnGDP

0.036

1 % level-4.323979

5 % level-3.580623

10 % level-3.225334

Stationary at 1st difference

lnPOP

0.0014

1 % level-4.374307

5 % level- 3.603202

10 % level- 3.238054

Stationary at 2nd difference

lnOP

0.001

1 % level-4.323979

5 % level-3.580623

10 % level-3.225334

Stationary at 1st difference

lnSCiE

0.0002

1 % level-4.323979

5 % level-3.580623

10 % level-3.225334

Stationary at 1st difference

All the independent variables are stationary at 2nd difference and the dependant variable is stationary at first difference.

B ) Ordinary Least Square ( OLS )

The OLS Method used to see the relationship between dependant and independent variables involves in this survey. The OLS bid will gauge the parametric quantities of a additive arrested development equation by the method of ordinary least squares. The void hypothesis is rejected if the p-value is little.

Determination: Simple Arrested development

Table1:

Model

EC=GDP

EC=POP

EC=OP

EC=SCiE

Changeless

-16835.09

-108084.8

15563.26

-16665.17

Coefficient

18.09687

7.730338

1158.293

5739.691

P-Value

0.001

0.001

0.0003

0.001

R-Squared

0.873864

0.968905

0.374287

0.898953

Adjusted

R-Squared

0.869359

0.967794

0.351940

0.895345

T-Statistic

13.92774

29.53735

4.092546

15.78290

Akaike

info standard

21.72685

20.32654

23.32838

21.50507

Durbin Watson

0.553120

0.107273

0.201550

1.254345

Determination: Multiple Arrested developments

Table2:

Model

EC=?0+ ?1GDP+ ?2OP +?3POP+ ?SCiE+e

Changeless

-102691.5

Coefficient

GDP

OP

Dad

SCiE

-0.596142

315.2618

6.960402

274.6891

P-Value

GDP

OP

Dad

SCiE

0.7426

0.0011

0.0000

0.5784

R-Squared

0.988510

Adjusted R-Squared

0.986672

T-Statistic

GDP

OP

Dad

SCiE

-0.332018

3.673377

7.074021

0.563032

Akaike info standard

19.53093

Durbin Watson

0.825399

*** denote significance at the 1 % degree

** denote significance at the 5 % degree

Decision

The chief intent of the survey is to cognize the relationship among electricity ingestion, GDP, population, oil monetary value and construction alteration in economic system in order to acquire consequence to utilize in doing determination about our Malayan hereafter. These imply that electricity ingestion is an of import factor for Malaysia ‘s economic development as Malaysia is an energy-dependent state. This high demand of electricity is parallel with Malaysia ‘s economic policy which is to be are developed state in2020.. Therefore, sufficient supply of electricity is need to back up the industrial development and to better the efficiency of capital, employment and other factors. In position of policy of authorities, the findings of this survey recommend that electricity ingestion played an chief function in economic growing. Therefore, policies to command the supply of electricity are mandatory to do certain that the electricity is sufficient to back up Malaysia ‘s economic development.