Macroeconomic variables affecting electricity consumption—A portrait of the capital city of Nusantara (IKN)
DOI:
https://doi.org/10.18686/cest806Keywords:
GRDP per capita; household consumption; population; investment; unemployment; poverty; electricity consumptionAbstract
This study examines the linkages between gross regional domestic product (GRDP) per capita, household consumption, population, investment, unemployment, and poverty on electricity consumption. Ordinary least squares (OLS) regression was applied to three panel data models: panel A (the three IKN buffer zones), panel B (the seven outermost IKN support zones), and panel C (a combination of panels A and B), with the analysis covering the period 2014–2024. Quantitative observations reveal that household consumption and population consistently contribute positively and significantly to electricity consumption across all panels. In panel A, GRDP per capita also has a positive effect, while poverty has a negative effect. In panel B, GRDP per capita and investment actually have a negative effect; yet, the opposite is true in panel C, where GRDP per capita continues to exert a negative influence on electricity consumption. In essence, household consumption and population size are the most consistent variables explaining electricity consumption in the IKN. Building on existing findings, this contribution offers a novel breakthrough by providing several region-based empirical alternatives for evaluating developing regions such as the IKN, an area still relatively under-explored in the literature. Furthermore, it provides an initial understanding of the dynamics of electricity demand during the early stages of IKN’s development, which could pave the way for new approaches to sustainable development policies, particularly in energy planning. Methodological advancements may be considered to enhance future research.
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