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Household Fuel Choice in Urban Ethiopia: A Random Effects Multinomial Logit Analysis

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  • Alem, Yonas
  • Beyene, Abebe D.
  • Kohlin, Gunnar
  • Mekonnen, Alemu

Abstract

We use three rounds of a rich panel data set to investigate the determinants of household fuel choice and energy transition in urban Ethiopia. We observe that energy transition did not occur following economic growth in Ethiopia during the past decade. Regression results from a random effects multinomial logit model, which controls for unobserved household heterogeneity, show that households’ economic status, price of alternative energy sources, and education are important determinants of fuel choice in urban Ethiopia. The results also suggest the use of multiple fuels, or “fuel stacking behavior.” We argue that policy makers could target these variables to encourage transition to cleaner energy sources.

Suggested Citation

  • Alem, Yonas & Beyene, Abebe D. & Kohlin, Gunnar & Mekonnen, Alemu, 2013. "Household Fuel Choice in Urban Ethiopia: A Random Effects Multinomial Logit Analysis," Discussion Papers dp-13-12-efd, Resources For the Future.
    • Handle: RePEc:rff:dpaper:dp-13-12-efd
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    References listed on IDEAS

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    1. Narasimha Rao, M. & Reddy, B. Sudhakara, 2007. "Variations in energy use by Indian households: An analysis of micro level data," Energy, Elsevier, vol. 32(2), pages 143-153.
    2. Catherine Wolfram & Orie Shelef & Paul Gertler, 2012. "How Will Energy Demand Develop in the Developing World?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 119-138, Winter.
    3. Beyene, Abebe D. & Koch, Steven F., 2013. "Clean fuel-saving technology adoption in urban Ethiopia," Energy Economics, Elsevier, vol. 36(C), pages 605-613.
    4. Ouedraogo, Boukary, 2006. "Household energy preferences for cooking in urban Ouagadougou, Burkina Faso," Energy Policy, Elsevier, vol. 34(18), pages 3787-3795, December.
    5. Peter Haan & Arne Uhlendorff, 2006. "Estimation of multinomial logit models with unobserved heterogeneity using maximum simulated likelihood," Stata Journal, StataCorp LP, vol. 6(2), pages 229-245, June.
    6. Heltberg, Rasmus, 2005. "Factors determining household fuel choice in Guatemala," Environment and Development Economics, Cambridge University Press, vol. 10(03), pages 337-361, June.
    7. Kebede, Bereket & Bekele, Almaz & Kedir, Elias, 2002. "Can the urban poor afford modern energy? The case of Ethiopia," Energy Policy, Elsevier, vol. 30(11-12), pages 1029-1045, September.
    8. Leiwen Jiang & Brian C. O'Neill, 2004. "The energy transition in rural China," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 21(1/2), pages 2-26.
    9. Chambwera, Muyeye & Folmer, Henk, 2007. "Fuel switching in Harare: An almost ideal demand system approach," Energy Policy, Elsevier, vol. 35(4), pages 2538-2548, April.
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    11. Alem, Yonas & Söderbom, Måns, 2012. "Household-Level Consumption in Urban Ethiopia: The Effects of a Large Food Price Shock," World Development, Elsevier, vol. 40(1), pages 146-162.
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    Cited by:

    1. Tembo, Solomon T. & Mulenga, Brian P. & Sitko, Nicholas, 2015. "Cooking Fuel Choice in Urban Zambia: Implications on Forest Cover," Food Security Collaborative Working Papers 202883, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    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

    urban Ethiopia; energy choice; random effects multinomial logit;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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