Jeyhun I Mikayilov

• PhD
• Research Fellow at King Abdullah Petroleum Studies and Research Center

Using the updated population numbers and extended dataset covering the 1990-20221 period, we reestimate the electricity demand models for Saudi Arabian regions.

The adoption of more stringent fuel economy standards represents a pivotal pathway toward achieving net zero emissions in the transportation sector. By steadily increasing the fuel efficiency of vehicles, this approach drives a gradual but consistent decline in emissions. When coupled with the simultaneous integration of electric and alternative fu...

This paper empirically examines how financial sector development affects carbon dioxide emissions in three economically hydrocarbon-dependent post-Soviet economies: Azerbaijan, Russia, and Kazakhstan. To explore this relationship, we employed cointegration techniques to the data from 1990 to 2019. We found that financial sector development has a po...

Using an econometric model, we generate scenario projections of CO 2 emissions under different sets of assumptions on the underlying drivers. These drivers include GDP, the energy price, economic structure, and the underlying emissions trend. Our baseline scenario projects that Saudi CO 2 emissions will rise from 540 Mt in 2019 to 621 Mt in 2030 an...

We address the shortcomings associated with modelling national aggregate electricity consumption in a large and diverse country with unique regional characteristics. Focusing on Saudi Arabia, we employ an econometric approach to analyse the distinct responses of its regions to electricity prices and income levels. The study employs a general to spe...

The rebound effect refers to the phenomenon where energy efficiency improvements lead to increased energy consumption, offsetting some of the expected energy savings. This article aims to estimate the direct rebound effect of residential electricity consumption in Saudi Arabia and explores potential solutions to mitigate its impact. Understanding t...

This study examines the impact of domestic fuel prices, population, and economic activity on transport CO 2 emissions, employing Saudi Arabia as a case study. The research uncovers statistically significant long-term associations between these variables. Despite transport CO 2 emissions demonstrating slight responsiveness to fuel price alterations,...

Saudi Arabia enacted two waves of energy price reforms in 2016 and 2018 to effectively gauge their impact to curb historically fast-growing electricity demand. We quantify the effects of these policy measures on regional fuel consumption and carbon emissions. We model the resulting emissions and fuel savings on the supply side using an optimization...

This research presents a comprehensive analysis of electricity demand factors in Saudi Arabia, focusing on the government sector across different regions. The findings show that income statistically impacts government sector electricity demand in all regions of Saudi Arabia. This impact aligns with regional development characteristics. Notably, mor...

This paper estimates the responses of drivers of electricity demand for commercial consumers in Saudi Arabia at a regional level. We demonstrate that the regional variation of response to changes in income and prices reflects the level of development of the commercial sector per region. The Southern region’s commercial electricity demand is sensiti...

To evaluate the success of the realized policies we need to investigate the historical relationships and assess the impacts of different drivers on the indicator being explored. In this regard, considering the undeniable importance of the transition to renewable energy, this work empirically explores the behavior of renewable energy consumption in...

Natural gas is frequently introduced as a “transitional fuel”. Because burning natural gas emits less carbon dioxide emissions than burning either oil or coal. Additionally, the intermittent nature of low-carbon electricity generation creates imperative for using natural gas for power generation. The role of natural gas is currently under scrutiny...

Evaluating potential outcomes of energy price reforms is essential for policymakers to assess their effectiveness. In 2016 and 2018, the Saudi government enacted two waves of energy price reforms to curb historically fast-growing electricity demand. We quantify the effects of these measures on regional fuel consumption and carbon emissions. We deve...

This study firstly analyzes the impact of energy intensities and income on CO2 emissions in Russia, applying different estimation methods to the data period from 1990 to 2020. In addition, the study forecasts CO2 emissions considering 2030 targets under different assumptions and assesses the achievability of the set target. The estimation results c...

It is useful to provide a brief overview of the development stages of KGEMM, as these stages shaped the structure of the current version of the model. As mentioned previously, KGEMM has been developed to have a better representation of the Saudi Arabian economic (sectoral and macro) and energy relationships. The main motivation for developing it wa...

As mentioned earlier, MEMs are evaluated and validated using in-sample and out-of-sample simulations, and policy analysis, among other validation methods. In this section, we run KGEMM for in-sample forecasting and out-of-sample policy analysis to evaluate its predictive ability. Hasanov and Joutz (2013) provide an overview of the literature that c...

The objective of this book is to introduce the KAPSARC Global Energy Macroeconometric Model (KGEMM) and to conduct a detailed survey of the existing macroeconomic models for Saudi Arabia discussing their strengths and weaknesses. KGEMM is a policy analysis tool for examining the impacts of domestic policies and changes in global economy including e...

This chapter briefly describes the methodological framework KGEMM uses. KGEMM is a hybrid model, i.e., it brings together theoretical and empirical coherences at some degree. Put differently, KGEMM nests “theory-driven” and “data-driven” approaches as suggested by Hendry (2018), among others, and employed by modelers in building semi-structural mac...

This chapter reports the estimated long-run equations and identities in Sects. 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, and 7.9 while the estimated short-run equations, i.e., final ECM specifications associated with the long-run equations are reported in Appendix B to save space in the main text. Note that the long-run and ECM equations are estimate...

One of the heaviest resource-consuming tasks of KGEMM, as with all MEMs, is the collection, update, revision, and maintenance of data. In econometric modeling, data are the key elements in determining the statistical properties of relationships. In this regard, data availability plays an important role in establishing linkages between the variables...

In a very broad sense, KGEMM is a demand-side macroeconometric model augmented with several supply-side representations. The fifth version of KGEMM, presented in this book, has more supply-side augmentation compared to earlier versions. Welfe (2011) among others discuss that for macroeconometric models to be used for policy analysis and projections...

The transition to renewable energy is key for sustainable development. Therefore, one of the sustainable development goals (SDG) of United Nations (UN) is to shift towards clean energy. However, in many resource-rich countries several factors can stand as barriers towards the transition process. In this regard, this paper examines the influence of...

What would carbon dioxide (CO2 ) emissions and fuel costs have been if Saudi Arabia had not implemented residential electricity price reforms in 2016 and 2018? This commentary aims to assess the unobserved contribution of such policy measures to mitigating emissions through rationalizing the use of domestic energy. Moreover, Saudi Arabia’s upda...

This study contributes to the literature on energy demand by developing a theoretical framework, in which energy demand is a function of total factor productivity (TFP) alongside traditional factors such as price and income. The proposed theoretical framework is examined using annual data on energy consumption, TFP, income, and energy price for 49...

This study aims to explore the impact of output and wage on labour demand in Saudi Arabia at sectoral level. We applied cointegration and equilibrium correction methods to the time-series data of 10 sectors over 1995-2016 using the demand side framework and considering the structural breaks in the data. We found that in the long run, the employment...

This paper contributes to the environmental literature by (i) demonstrating that the estimated coefficients and the statistical significance of the non-leading terms in quadratic, cubic, and quartic logarithmic environmental Kuznets curve (EKC) specifications are arbitrary and should therefore not be used to choose the preferred specification and (...

This paper contributes to the Environmental literature by i) demonstrating that the estimated coefficients and the statistical significance of the non-leading terms in quadratic, cubic, and quartic logarithmic Environmental Kuznets Curve EKC specifications are arbitrary and should therefore not be used to choose the preferred specification; and ii)...

This study investigates the income and price elasticities of gasoline demand for a fuel subsidizing country case, applying three different time-varying coefficient approaches to the data spanning the period from January 2002 to June 2018. The empirical estimations concluded a cointegration relationship between gasoline demand, income, and gasoline...

This study investigates the drivers of residential electricity demand in Saudi Arabia at a regional level for the period 1990–2018 using Structural Time Series Modeling. We find that Saudi Arabia's two waves of energy price reforms in 2016 and 2018 have had different impacts on residential electricity consumption across its regions. The empirical e...

A major challenge in implementing carbon pricing policies is to account for their economic outcomes. Notably, competitiveness is the key economic performance indicator to be considered. Extant theory mainly emphasizes the negative effect of carbon pricing on competitiveness; however, there is no consensus in the empirical literature. This may be du...

Aggregate residential electricity consumption in Saudi Arabia has increased rapidly over the past several decades, largely due to population increases and fast economic growth (SAMA 2019). The growth in electricity consumption has been driven, among other factors, by government-administered prices fixed in nominal terms for years with minor adjustm...

The current study explores the effect of Foreign Direct Investment (FDI) on CO2 emissions in Azerbaijan utilizing time series data spanning from 1996 to 2013. The structural time series modeling (STSM) approach is employed in empirical estimations. The STSM framework allows parameters to evolve over time. Estimation results show that the coefficien...

The paper investigates gasoline consumption in case of oil-exporting country applying Time-varying Coefficient Cointegration approach to the data from 1980 to 2017. Empirical estimations show that long-run income and price elasticities are not constant and are responsive to price and income fluctuations in the period considered. The income elastici...

The paper examines the electricity demand behavior for Saudi Arabia, using annual data for the period of 1990–2016, at regional level. The study finds that income, price and population are the main drivers of electricity demand at regional level. Although, the impacts vary across regions (central, eastern, southern and western), the estimated elast...

One of the most discussed topics of Environmental economics is the choice of the appropriate functional form to examine the income-environmental impact relationship. Since the developing economies encounter different development stages, the use of relevant specifications and techniques gains special importance to reveal the country-specific relatio...

The study analyzes the impact of economic growth, carbon dioxide (CO2) emissions, and oil price on renewable energy consumption in Azerbaijan for the data spanning from 1992 to 2015, utilizing structural time series modeling approach. Estimation results reveal that there is a long-run positive and statistically significant effect of economic growth...

The study explores the impact of international tourism on consumption-based CO2 emissions in the case of Azerbaijan for the period of 1995–2013. The results of the long-run estimations revealed that the relationship between CO2 emissions and international tourism revenues is N-shaped. This finding also indicates that the EKC hypothesis does not hol...

Statistika istər başqa sahələrdə, istərsə də iqtisadiyyat və biznes sahələrində daha adekvat qərarların verilməsinə imkan verən elm sahəsidir. Statistika anketlərin və eksperimentlərin aparılması ilə məlumatların əldə olunması da daxil olmaqla, məlumatın bütün detalları və aspektləri ilə məşğul olur. Statistika həmçinin qərar vermə prosesində istif...

In this paper, we revisit the theoretical framework for energy demand. We then use this theoretical framework to empirically model the Saudi Arabian industrial electricity demand. We show, in the case of Saudi Arabian data, that imposing parsimonious energy demand specification on data without testing relevant assumptions can lead to biased estimat...

The Saudi economy is going through a remarkable transformation process in light of Saudi Vision 2030, a masterplan of the Kingdom for future development to achieve more than 300 specific targets and about 80 large projects. This implies significant changes in the structures, proportions, and developments of the sectors of the economy. To better und...

The objective of the research presented in this paper is to conduct a detailed survey of the existing macroeconomic models for Saudi Arabia and to introduce the KAPSARC Global Energy Macroeconometric Model (KGEMM). The the paper also considers the strengths and weaknesses of the earlier models. KGEMM is a policy analysis tool for examining the impa...

The current paper investigates the gasoline demand relationship in the case of Turkey, utilizing different econometric techniques and using quarterly data spanning from 2000Q1 to 2019Q1. The estimation results revealed that income and gasoline price are the main drivers of consumption. The found long-run income, price and auto stock elasticities ar...

In this short note, we described step-by-step derivations of the industrial energy demand function from the production function framework and provided researchers with two specifications. Then we applied these theoretical specifications to the time series data as empirical analysis. We concluded that theories should be considered at the beginning o...

After the drop in international oil prices in 2014, oil-exporting countries started to launch new policies to develop their economies. It is important that policymakers involved in energy and economic development understand how economic agents respond to increased energy prices and how the latter affects the demand for different fuels. Saudi Arabia...

The government of Saudi Arabia has successfully reduced the country’s energy intensity, helped by its establishment of the Saudi Energy Efficiency Center (SEEC) and a series of energy price reforms (EPR) that began in 2016. However, how households have responded to the EPR is an important matter that warrants serious consideration. The Electricity...

The growth path of gasoline demand, a key strategic fuel, has important implications for oil security, oil-related carbon emissions, and refinery investment (Dahl 2012). As such, understanding how fluctuations in income and gasoline prices could affect the demand for oil in Saudi Arabia allows policymakers to assess what drives gasoline demand over...

The article Does CO2 emissions–economic growth relationship reveal EKC in developing countries? Evidence from Kazakhstan, written by Fakhri J. Hasanov, Jeyhun I.

In the original version of the book, the Chapter “How Total Factor Productivity Drives Long-Run Energy Consumption in Saudi Arabia” was not published under the open access category. The category has been changed. The erratum chapter and book have been updated.

The polynomial functional specification is widely used in environmental and ecological economics. When different powers of the same variable enter to the specification the elasticity of explained variable with respect to that variable should be obtained using the elasticity formula. Since, in this case the elasticity itself is a function, one need...

p>The paper theoretically derives a framework, which expresses energy demand as a function of Total Factor Productivity (TFP), employing optimization techniques. </p

p>The paper theoretically derives a framework, which expresses energy demand as a function of Total Factor Productivity (TFP), employing optimization techniques. </p

The study investigates the long-run impact of tourism development on ecological footprint by employing the time-varying coefficient cointegration approach (TVC), in addition to the conventional cointegration techniques in the case of Azerbaijan for the period of 1996–2014. Based on the TVC estimation results, the coefficient of tourism development,...

This paper investigates the CO2 emissions–economic growth relationship in Kazakhstan for the period 1992–2013. Johansen, ARDLBT, DOLS, FMOLS, and CCR cointegration methods are used for robustness purpose. We start with the cubic functional form to rule out any misleading results that can be caused by misspecification. Although the estimation result...

The study investigates the long-run impact of tourism development on ecological footprint by employing the time-varyingcoefficient cointegration approach (TVC), in addition to the conventional cointegration techniques in the case of Azerbaijanfor the period of 1996–2014. Based on the TVC estimation results, the coefficient of tourism development, w...

The current study investigates the income and price impacts of gasoline demand for Russian case, employing different cointegration techniques to the data spanning from 2002Q1 to 2018Q1. The cointegration exercises confirmed the existence of the long-run relationship among the variables of interest. Estimation results showed that income and price ha...

In this study, we investigate how total factor productivity (TFP), alongside income, price, and population, shapes energy consumption in the long-run in Saudi Arabia, the world’s number one oil exporter. To do so, we first estimate a production function and construct the associated TFP series, and then assess TFP’s impact on energy consumption. To...

In this study, we investigate how total factor productivity (TFP), alongside income, price, and population, shapes energy consumption in the long-run in Saudi Arabia, the world’s number one oil exporter. To do so, we first estimate a production function and construct the associated TFP series, and then assess TFP’s impact on energy consumption. To...

This study investigates the impact of social and physical infrastructure spending on the non-oil tradable and non-tradable sectors while controlling for non-oil capital stock and employment in the Azerbaijani economy for the period 1995-2014. The analysis employs the Engle-Granger and Phillips-Ouliaris cointegration tests using FMOLS estimation res...

World is struggling with the upcoming threats of CO2 emissions, that is why, in order to achieve global environmental sustainability in the greenhouse gas emissions, several countries in 1997 agreed on Kyoto protocol which imposes some obligations on developed nations in the reduction of greenhouse gas emissions. The growing trend of CO2 emissions...

The relationship between CO 2 emissions, the main gas responsible for global warming, and economic growth is among the most studied themes of environmental economics. Reducing overall emissions while keeping a high pace of economic development is at the heart of the sustainable development concept. When emissions grow less rapidly than GDP environm...

This paper examines the relationship between energy consumption, financial development, and economic growth in an oil-rich economy—Azerbaijan—employing cointegration techniques to the data ranging from 1992 to 2015. The results confirm the existence of a long-run relationship among the variables. Also, we find that there is a positive and statistic...

While international trade and Carbon dioxide (CO2) emissions have been well-studied, a panel of only oil-exporting developing economies has not been considered. This paper addresses that gap by investigating the role of the trade in CO2 emissions using a panel of nine oil exporting countries. In addition, we examine the impacts of exports and impor...

This paper investigates the relationship between the economic growth and CO2 emissions in Azerbaijan. A cointegration analysis is conducted over the period 1992–2013. For getting more robust results, Johansen, ARDLBT, DOLS, FMOLS and CCR methods are employed to explore cointegration and estimate long-run coefficients. We use cubic, quadratic and li...

Bu çalışmada Azerbaycan’da parasal aktarım mekanizmalarından faiz oranı kanalının işleyişip işlemediği test edilmiştir. Bu amaçla, 2000:04‐2015:12 dönemine ilişkin veriler kullanılarak Vektör Hata Düzeltme Modeli (VECM) oluşturulmuştur. Elde edilen bulgular, faiz oranı kanalının Azerbaycan’da çalıştığını göstermektedir.

The article describes the current situation and the work has been done and should be done by evaluation of the current state of sustainable development from the perspective of sustainable transport of the world and Azerbaijan. And the evaluation of alternatives of Azerbaijan example for the achievement of sustainable transport, as well as complicat...

International migration significantly affects economic, social, cultural, and political factors of the country. Owing to this situation, it can be said that the reasons of international migration should be analyzed in order to control this problem. The purpose of this study is to determine the influencing factors of international migration in Azerb...

We studied impacts of population groups of 15-64 and 65-above on residential electricity use in Kazakhstan in the STIRPAT framework. Unlike earlier studies for Kazakhstan in the STIRPAT framework, we applied time series cointegration and error correction methods. Results from the autoregressive distributed lags bounds testing approach indicate a si...

We studied impacts of population groups of 15–64 and 65–above on residential electricity use in Kazakhstan in the STIRPAT framework. Unlike earlier studies for Kazakhstan in the STIRPAT framework, we applied time series cointegration and error correction methods. Results from the autoregressive distributed lags bounds testing approach indicate a si...

The study investigates the causal relationship between energy consumption and economic growth in Azerbaijan using annual data covering the period from 1990 to 2015. We used Toda-Yamamoto causality test framework of vector autoregressive (VAR) model to test causal relationship between the variables. The results of this test show that there is bidire...

Recent literature has shown that electricity demand elasticities may not be constant over time and this has investigated using time-varying estimation methods. As accurate modeling of electricity demand is very important in Azerbaijan, which is a transitional country facing significant change in its economic outlook, we analyze whether the response...

The study examines the impacts of urbanization, energy consumption and real GDP on atmospheric pollution from automobile transport in Azerbaijan in the STIRPAT framework. Since the study uses time series variables the unit root properties of employed variables are tested for non-stationarity. Stationarity of the data is tested using conventional Au...

In this study, we examined the impacts of population age groups of 15-64 and 65-above on residential electricity consumption in Azerbaijan within the STIRPAT framework. Unlike many prior studies of STIRPAT framework, we analyzed this impact, employing co-integration and error correction method in order to rule out possible spurious estimation resul...

In this study, we have examined impacts of energy consumption, real GDP and population on the pollution from the automobile transport in Azerbaijan case. We employed annual time series data for the 1990-2014 time span. First the data tested for stationarity and then we employed the Autoregressive Distributed Lags Bounds Testing approach to cointegr...

To help explain the common failure of oil or other natural resource exporting countries to diversify into industry, it has been common to trace this failure to real exchange rate appreciation. This has also been done in Azerbaijan. However, because Azerbaijan has devoted so much of its oil revenues to government investment, Azerbaijan provides a su...

Urbanizasıyanın enerji istehlakına təsirlərinin ekonometrik qiymətləndirilməsi mövzusu Azərbaycan nümunəsində ədəbiyyatlarda tədqiqatlara demək olar ki rast gəlinməmişdir. Əksər tədqiqat işləri ümumi əhali və onun yaş qruplarının enerji istehlakı üzərində təsirlərinin araşdırılması olmuşdur. Bu nöqteyi nəzərdən, Azərbaycanda urbanizasiyanın enerji...

Azerbaycan genel anlamda dışa açık yükselen bir ekonomi olarak değerlendirilebilir. Üstelik petrol üreten ve ihraç eden bir ekonomi olarak son yıllarda ciddi bir büyüme sürecine girmiştir. İncelenen dönemde enerji talebinin her geçen gün artması, kilit bir enerji kaynağı olan petrolün fiyatını arttırmakta, buna bağlı olarak Azerbaycan gibi petrol i...

Undoubtedly, oil prices play a crucial role in the macroeconomic performances of oil-exporting developing countries. In this regard, the exchange rate is one of the key macroeconomic indicators worthy of investigation. Existing literature shows that world oil prices play an important role in the appreciation of the exchange rates of oil-exporting d...

Undoubtedly, oil prices play a crucial role in the macroeconomic performances of oil-exporting developing countries. In this regard, the exchange rate is one of the key macroeconomic indicators worthy of investigation. Existing literature shows that world oil prices play an important role in the appreciation of the exchange rates of oil-exporting d...

The significant share of oil sector of the Azerbaijan export portfolio necessitates promotion of non-oil exports. This study analyzes weather the commodities which contain the main share (more than 70%) in non-oil export are traditional or non-traditional areas, using the so-called Commodity-specific cumulative export experience function, for the 1...

Azerbaijan is an oil rich country facing three severe problems at the same time: economic volatility, the need to promote industrial diversification and the recent sharp fall in oil prices which many expect to continue. It is thus a highly appropriate time to conduct a study for this resource-rich country that would relate its insufficient and inef...

The study investigates the impact of urbanization and income on energy consumption under the STIRPAT framework approach for Azerbaijani time series data for the period of 1990-2012. First the stationarity properties of variables are tested by Dickey-Fuller test, and then the cointegration relationship tested based on FMOLS and CCR cointegration met...

Policymakers in developing and transitional economies require sound models to: (i) understand the drivers of rapidly growing energy consumption and (ii) produce forecasts of future energy demand. This paper attempts to model electricity demand in Azerbaijan and provide future forecast scenarios-as far as we are aware this is the first such attempt...

1% increase in oil prices cause an average 1.66% increase in government capital expenditures a 1% increase in government capital expenditures is associated with 0.388% increase in real non-oil GDP. 1-unit increase in government capital expenditures is associated with a 0.157 units decrease in non-oil exports.

Azerbaijan is an oil rich country facing three severe problems at the same time: economic volatility, the need to promote industrial diversification and the recent sharp fall in oil prices which many expect to continue. It is thus a highly appropriate time to conduct a study for this resource-rich country that would relate its insufficient and inef...

This study investigates the role of budget expenditure composition over Azerbaijan’s non-oil economic growth in the long-run by classifying public spending as capital, social and other expenditures. Authors’ employ ARDLBT approach to co-integration for the period of 2000Q1-2014Q4 to estimate long-run contribution of each spending category before-an...