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Urban Fuel Demand in Ethiopia: An Almost-Ideal Demand System Approach

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  • Gebreegziabher, Zenebe
  • Oskam, Arie J.
  • Bayou, Demeke
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    Abstract

    This paper investigates the opportunities for reducing the pressure of urban centers on rural forest areas, using a dataset of 350 urban households in Tigrai in northern Ethiopia. We applied an almost-ideal demand system to fuels. Because the same fuels were not always used by households, the analysis started with a probit model of fuel use. The inverse Mills ratios derived from it were inserted into the estimation of the fuel demand system to obtain a full set of price and income elasticities. The results suggest that reducing the pressure of urban centers on local forests cannot be seen in isolation from broader development policies aimed at raising the level of education and income of the population. Higher income also stimulates the demand for fuel.

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    File URL: http://www.rff.org/RFF/documents/EfD-DP-10-20.pdf
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    Bibliographic Info

    Paper provided by Resources For the Future in its series Discussion Papers with number dp-10-20-efd.

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    Date of creation: 23 Aug 2010
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    Handle: RePEc:rff:dpaper:dp-10-20-efd

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    Related research

    Keywords: price elasticities; income elasticities; almost-ideal fuel demand system; reducing deforestation; Ethiopia;

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    1. John H. Y. Edwards & Christian Langpap, 2005. "Startup Costs and the Decision to Switch from Firewood to Gas Fuel," Land Economics, University of Wisconsin Press, vol. 81(4).
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    Cited by:
    1. Ngui, Dianah & Mutua, John & Osiolo, Hellen & Aligula, Eric, 2011. "Household energy demand in Kenya: An application of the linear approximate almost ideal demand system (LA-AIDS)," Energy Policy, Elsevier, vol. 39(11), pages 7084-7094.

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