Determinants of Nicaragua energy consumption

Abstract

Electrical energy consumption is considered as part of a derived demand, since it depends on the goods used. Energy consumption analysis and the variables that affect it, allow us to determinate the result of changes in consumption and the individual impact of the variables. The behavior of electricity consumption and its price, in addition to the number of users and income, were analyzed at national level during the 2014-2019 period, a log-log model was applied to measure relative effects over consume. The description of the variables is carried out through the trend, on the seasonally adjusted variables. Energy consumption and the number of users show a positive trend, while price and income change trend over time. Both, consumption and income, measured through the IMAE, show a fall in 2018, although it is this last variable that shows the greatest decrease. Consumption presented the highest relative volatility in 2018, while the variable with the greatest stability in its growth was the number of users. Electric power consumption is significantly affected by the number of users, price and income, with price being the only variable under study that has a negative relationship with consumption.