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

Zenebe Gebreegziabher, Arie J. Oskam and Bayou Demeke

RFF Working Paper Series from Resources for the Future

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.

Keywords: price elasticities; income elasticities; almost-ideal fuel demand system; reducing deforestation; Ethiopia (search for similar items in EconPapers)
JEL-codes: O13 O18 Q23 (search for similar items in EconPapers)
Date: 2010-08-23
New Economics Papers: this item is included in nep-afr, nep-agr, nep-ene and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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