Assessing the effectiveness of the policies to boost hydropower consumption

Abstract

Purpose – This paper aims to investigate, with the view to determine the effectiveness of blueprints that are designed to boost hydroelectricity use, the unit root properties of hydroelectricity consumption in 50 countries for the period from 1965 to 2012. Design/methodology/approach – A newly proposed non-linear unit root test is used for the purpose of estimations. Findings – The results show that 26 countries (which are mostly developing countries) or 52 per cent of the total sample have unit roots in their hydroelectricity consumption series. Practical implications – The policy implication of these results is that policies associated with the enhancement of hydroelectric power use are likely to be effective in several cases, especially in the developing countries. Originality/value – The main contribution of this paper is that we estimate the non-stationarity of hydroelectricity series within a non-linearity framework. Failure to use a non-linearity method in the presence of non-linear data-generation processes will create biased inferences and wrong policy implications.