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Household energy demand in Kenya: An application of the linear approximate almost ideal demand system (LA-AIDS)

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  • Ngui, Dianah
  • Mutua, John
  • Osiolo, Hellen
  • Aligula, Eric

Abstract

This paper estimates price and fuel expenditure elasticities of demand by applying the linear Approximate Almost Ideal Demand system (LA-AIDS) to 3665 households sampled across Kenya in 2009. The results indicate that motor spirit premium (MSP), automotive gas oil (AGO) and lubricants are price elastic while fuel wood, kerosene, charcoal, liquefied petroleum gas (LPG) and electricity are price inelastic. Kerosene is income elastic while fuel wood, charcoal, LPG, electricity, MSP and AGO are income inelastic. The results also reveal fuel stack behaviour, that is, multiple fuel use among the households. Main policy implications of the results include increasing the penetration of alternative fuels as well as provision of more fiscal incentives to increase usage of cleaner fuels. This not withstanding however, the household income should be increased beyond a certain point for the household to completely shift and use a new fuel.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 39 (2011)
Issue (Month): 11 ()
Pages: 7084-7094

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Handle: RePEc:eee:enepol:v:39:y:2011:i:11:p:7084-7094

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Web page: http://www.elsevier.com/locate/enpol

Related research

Keywords: Energy; Demand; LA-AIDS model;

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Cited by:
  1. Oyinbo, O. & Omolehin, R. A. & Abdulsalam, Z., 2013. "Analysis of the Demand for Rice in Kaduna State, Nigeria," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 5(3), September.

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