Internet Usage, Economic Growth and Electricity Consumption: The Case of EU-15

The purpose of this study is to examine the impacts of internet usage and economic growth on electricity consumption in EU-15 countries. In this study using panel cointegration test developed by Westerlund and Edgerton (2007), the existence of a cointegration relationship in both the constant model and the constant and trend model is proved. The findings obtained by using the panel cointegration method indicate that internet usage and economic growth have a significant impact on electricity consumption in the long run. After identifying the existence of a panel cointegration relationship in EU-15 countries, the long-run cointegration coefficients were obtained with the Augmented Mean Group estimators developed by Eberhard and Bond (2009), Eberhardt and Teal (2010). The long-run coefficient results demonstrate that a change in internet usage for all EU-15 countries can reduce electricity consumption at a very low rate, but a change in economic growth increases electricity consumption. The country-based empirical findings suggest that the impact of internet usage and economic growth on electricity consumption varies in different countries.