Forecasting Energy Consumption in the Agriculture Sector of Iran Using ARIMA and ARCH Models

Energy is an important and key input in the whole economy and agriculture sector production. In recent years due to the increase in the financial burden of energy subsidies، targeting these subsidies has been considered. Given the likely impact of targeting on energy consumption، this study forecasts the consumption of energy carriers (oil products and electricity) in agriculture using ARIMA and ARCH models. The selected period covers 1347-1384 (1968-2005)، with the last three years used to test the forecasting ability of the models. The results of the study indicate a small increment in energy consumption in agriculture. Prediction error of ARIMA was lower than the ARCH one except for oil products.