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Estimation of elasticities for domestic energy demand in Mozambique

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  • Arthur, Maria de Fátima S.R.
  • Bond, Craig A.
  • Willson, Bryan

Abstract

In Mozambique, households consume a mix of energy sources to satisfy their needs for lighting and cooking and, for wealthier households, other domestic necessities such as refrigeration. The domestic energy mix depends on the prices of the sources and on the capability of the household to invest in the energy-consuming appliances required to satisfy those needs. Based on data from a household survey carried out in Mozambique during 2002/3 (IAF), this paper calculates the price and the income elasticities of demand for domestic energy, using an econometric method developed by Deaton. The calculations are made for all households at the national level, differentiating for urban and rural households, and for the northern households of Mozambique. In the econometric formulation, proxies for the ownership of energy appliances per household are used, allowing a simple evaluation of the effects of asset ownership on the demand for energy. Own- and cross-price elasticities for five individual domestic sources are obtained: low-grade sources such as firewood and charcoal are less elastic (elasticities of −0.41 and −0.28 respectively) than candles, kerosene and electricity (respectively −0.88, −0.79 and −0.60).Income elasticities are respectively 0.45, 0.32, 0.93, 0.84 and 0.69, placing firewood and charcoal as the less responsive to income variations and candles and kerosene as the most responsive. We also comment on the factors influencing domestic energy transition.

Suggested Citation

  • Arthur, Maria de Fátima S.R. & Bond, Craig A. & Willson, Bryan, 2012. "Estimation of elasticities for domestic energy demand in Mozambique," Energy Economics, Elsevier, vol. 34(2), pages 398-409.
    • Handle: RePEc:eee:eneeco:v:34:y:2012:i:2:p:398-409
    DOI: 10.1016/j.eneco.2011.08.006
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    Cited by:

    1. MacCarty, Nordica A. & Bryden, Kenneth Mark, 2016. "An integrated systems model for energy services in rural developing communities," Energy, Elsevier, vol. 113(C), pages 536-557.
    2. Barrientos, Jorge & Velilla, Esteban & Tobón Orozco, David & Villada, Fernando & López Lezama, Jesús M., 2018. "On the estimation of the price elasticity of electricity demand in the manufacturing industry of Colombia," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE, issue 88, pages 155-182, January.
    3. Mahumane, Gilberto & Mulder, Peter, 2015. "Mozambique Energy Outlook, 2015-2030. Data, scenarios and policy implications," MPRA Paper 65968, University Library of Munich, Germany.
    4. Alem, Yonas & Beyene, Abebe D. & Köhlin, Gunnar & Mekonnen, Alemu, 2015. "Modelling Household Cooking Fuel Choice: a Panel Multinomial Logit Approach," Working Papers in Economics 632, University of Gothenburg, Department of Economics.
    5. Desiderio Romero-Jordán & Pablo del Río & Cristina Peñasco, 2014. "Household electricity demand in Spanish regions. Public policy implications," Working Papers 2014/24, Institut d'Economia de Barcelona (IEB).
    6. repec:eee:enepol:v:113:y:2018:i:c:p:633-642 is not listed on IDEAS
    7. Mahumane, Gilberto & Mulder, Peter, 2016. "Introducing MOZLEAP: An integrated long-run scenario model of the emerging energy sector of Mozambique," Energy Economics, Elsevier, vol. 59(C), pages 275-289.
    8. Yurtseven, Çağlar, 2015. "The causes of electricity theft: An econometric analysis of the case of Turkey," Utilities Policy, Elsevier, vol. 37(C), pages 70-78.
    9. Daniel de Abreu Pereira Uhr & Júlia Gallego Ziero Uhr, André Luis Squarize Chagas, 2017. "Estimation of price and income elasticities for the Brazilian household electricity demand," Working Papers, Department of Economics 2017_12, University of São Paulo (FEA-USP).
    10. Espinosa Acuña, Óscar A. & Vaca González, Paola A. & Avila Forero, Raúl A., 2013. "Elasticidades de demanda por electricidad e impactos macroecon_omicos del precio de la energía eléctrica en Colombia || Elasticity of Electricity Demand and Macroeconomics Impacts of Electricity Price," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 16(1), pages 216-249, December.
    11. Muhammad Irfan & Michael P. Cameron & Gazi Hassan, 2017. "Household Energy Elasticities in Pakistan: An Application of the LA-AIDS Model on Pooled Household Data," Working Papers in Economics 17/11, University of Waikato.
    12. repec:eee:rensus:v:74:y:2017:i:c:p:1189-1209 is not listed on IDEAS
    13. Alem, Yonas & Beyene, Abebe D. & Köhlin, Gunnar & Mekonnen, Alemu, 2016. "Modeling household cooking fuel choice: A panel multinomial logit approach," Energy Economics, Elsevier, vol. 59(C), pages 129-137.

    More about this item

    Keywords

    Price elasticities; Income elasticities; Domestic energy; Households;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • D1 - Microeconomics - - Household Behavior
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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