The impact of electricity supply on economic growth in Sri Lanka

Yang (Energy Econ. 22 (2000) 309) has found a bi-directional causal relationship between gross domestic product and electricity consumption in Taiwan, ROC. This study applies Yang's model to examine the impact of electricity supply on economic growth in Sri Lanka. Morimoto and Hope (An extended CBA model of hydro projects in Sri Lanka (2001)) have found that the expected increase in economic output due to increased electricity supply (parameter EO) plays a crucial role in their cost benefit analysis model. This study shows that the application of Yang's regression analysis is one possible approach to estimate a better range for the parameter EO. The estimated figure is that an extra output of Rs. 88 000-137 000 ($US 1120-1740) for every 1 MW h increase in electricity supply. (C) 2003 Elsevier Science B.V. All rights reserved.