Master of Science in Economics

Faculty / School

Faculty of Business Administration (FBA)


Department of Economics

Date of Submission



Dr. Mohammad Nishat, Institute of Business Administration, Karachi

Project Type

MSECO Research Project

Access Type

Restricted Access


Pakistan’s energy deficit has become more and more pronounced since 2005, as energy supplies fail to keep up with the rising demand from growing economy and rising population. In Pakistan, little work has been done on calculating electricity demand. In this study, electricity consumption is tested against National income (GDP), Price (CPI), Distribution losses, Population growth and Electricity production. The study was conducted on aggregate level. Yearly data was constructed for this purpose from 1971-2012. Empirical work has been done using Johansen Cointegration test and Dickey Fuller test to check for unit root problem. Forecasting has been done using VECM model and ARIMA model and the results are compared. It was found that all the variables are significant and suggest an increasing trend in electricity consumption in the years ahead. These estimates will be helpful for policy makers who would be interested in future demand for electricity. Also the recommendations incorporated in this study would be used as guideline for policy making.


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