LAUSR

Abstract A vast number of studies have considered economic aspects of industrial energy consumption, whereas, to the best of our knowledge, very few studies have considered demographic aspects, and none of them provided a theoretical foundation for the demographic variables employed. Studying the effect of demographic factors on industrial energy consumption is also important because of the reasons found in the literature. This motivated us to develop a theoretical framework using features of production function and the labor market, in which industrial energy consumption is linked to both economic and demographic factors. We then empirically tested the reliability of the developed framework. To produce robust results, various unit root and cointegration tests, long-run estimation methods, small sample bias corrections, as well as two functional forms and two measures of the demographics were employed in the empirical analysis. The results are theoretically and empirically coherent: demographic and economic indicators have statistically significant long- and short-run impacts on industrial electricity consumption. Further analysis showed that the demographic indicators also exert statistically significant and theoretically coherent impacts on other energy types used in industry within this new framework. We concluded that the suggested framework can be used to examine the role of both demographic and economic factors in the industrial consumption of electricity and other energy types.