Consumption of Electricity and Oil in Jordan: A non-parametric analysis using B-splines

Mohammed I. Shahateet, Jaber M. Bdour

Abstract


This research is needed to provide scientific evidence that the consumption of electricity in Jordan substituted consumption of petroleum products. The study addresses changes of growth in both consumptions to analyze the impact of changes in electricity consumption on changes in the demand for oil in Jordan, both as annual growth percentages during 1971-2007. The method of B-spline is utilised to analyse and examine the shift from petroleum products to electricity. B-spline curves are also employed to determine the extent of this shift and when it did happen. To do that, the study employs a non-linear optimization model for the determination of B-spline order and function estimates. After that, it calculates the speed and acceleration of growth of both electricity and petroleum products. The study concludes that electricity has substituted petroleum products during several periods but major substitutions occurred during 1971-1976 and 2004-2007.

Keywords


Non-Parametric Analysis, Econometric Models, Economics of Energy.

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