Are shocks to disaggregated energy consumption in Malaysia permanent or temporary? Evidence from LM unit root tests with structural breaks

Hooi Hooi Lean, Russell Leigh Smyth

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31 Citations (Scopus)

Abstract

The objective of this paper is to examine whether energy consumption in Malaysia, disaggregated by sector and type, is stationary or contains a unit root. To realize our objective we apply the Lagrange multiplier (LM) family of unit root tests with up to two structural breaks. Depending on the decision rule for selecting between results in the no-break, one-break and two-break cases, we find that energy consumption is stationary for between 50 per cent and 70 per cent of the disaggregated energy series and between 25 per cent and 50 per cent of sectors. Implications for the Malaysian government's attempts to reduce fossil fuel consumption are discussed. © 2013 Elsevier Ltd.

Original languageEnglish
Pages (from-to)319-328
Number of pages10
JournalRenewable and Sustainable Energy Reviews
Volume31
DOIs
Publication statusPublished - Mar 2014

Keywords

  • Disaggregated energy consumption
  • Structural breaks
  • Unit root

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