Topics: Economic development, Economic growth, Economics Pages: 5 (407 words) Published: May 13, 2014
A panel data design in the research of Chinese per capital electricity consumption

Abstract: Currently, the economic growth development accompanied with consumption of energy. And to some extent, per capital consumption is one of the most suitable indicators for the economy growth. This report is going to explore regional difference on this variable over the period 1985-2013 (exclude 1992-1994, because of the data absence), as well as to reflect the tendency of the regional economic difference from one to another based on a sample of 29 provinces and municipalities.

Introduction and background: After the Chinese economic reforming, although Chinese economy has developed rapidly as the whole, there still exists unbalanced regional economic development and appear lots of abuses. Recent years, Chinese government implements some policies such as treating eastern region as the leader in the guiding the development of the country, western region development and revitalizing the northeast old industrial. However, there is no explicit conclusion that whether this difference of economy development trends to be bigger or convergence. It is well known that the proportion of tertiary industry in China is not big, the consumption of electricity mainly used for industry. Thus, to large extant, the consumption of the electricity can reflect the development of economy. In addition, Shin and lam (2004) indicated that the electricity consumption increase drives the increase of GDP. Thus, the report will test the convergence of Chinese per capital electricity consumption in different province and municipalities to investigate unbalanced regional economic development.

Firstly, panel data will be collected from National Bureau of Statistics, includes the yearly total electricity consumption and total population of 29 provinces and municipalities during the year of 1985 to 2013. The per capital electricity consumption is calculated by total electricity consumption divided by total population. The test of convergence can be divided into two parts, β and ɑ. ɑ convergence is going to test whether the standard deviation of per capital electricity consumption decrease as the time goes by, β convergence is going to test the increase rate of per capital electricity consumption decrease as the consumption level increases. And the time period will separate into three time stages, from 1985 to 2013, 1985 to 1992 and 1995 to 2013. The test will also use the dummy variable, in this case it takes the value of 1 for those regions that are located in the east, and zero otherwise.

Model equation:

i(i=1,2,……N) in time period (t=1,2,…..T), pec means per capital electricity consumption, u means random disturbance term. If β [ 1 March 2014]
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