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

Author

Listed:
  • Gebreegziabher, Zenebe
  • Oskam, Arie J.
  • Bayou, Demeke

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.

Suggested Citation

  • Gebreegziabher, Zenebe & Oskam, Arie J. & Bayou, Demeke, 2010. "Urban Fuel Demand in Ethiopia: An Almost-Ideal Demand System Approach," Discussion Papers dp-10-20-efd, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-10-20-efd
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    File URL: http://www.rff.org/RFF/documents/EfD-DP-10-20.pdf
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    References listed on IDEAS

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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.
    2. Arega, Tiruwork & Tadesse, Tewodros, 2017. "Household willingness to pay for green electricity in urban and peri-urban Tigray, northern Ethiopia: Determinants and welfare effects," Energy Policy, Elsevier, vol. 100(C), pages 292-300.

    More about this item

    Keywords

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

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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