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Energy Demand Substitution from Biomass to Imported Kerosene: Evidence from Tanzania

Michael Olabisi (), David L. Tschirley, David Nyange and Titus Awokuse ()

No 279913, Feed the Future Innovation Lab for Food Security Policy Research Papers from Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP)

Abstract: We analyze domestic household energy demand and use patterns in Tanzania, using a detailed household survey of purchase transactions, a multivariate probit model, and the QUAIDS modeling framework. The main fuel sources that we study are kerosene, charcoal, and firewood. These three accounted for 96.5% of spending on energy by households. Charcoal and firewood are used for cooking while kerosene is used for both lighting and cooking. Kerosene is almost exclusively imported, while charcoal and firewood are produced domestically. These fuel sources are important, given the impacts of wood harvesting on the environment and kerosene imports on public finances. We find a statistically significant response in kerosene demand to charcoal prices, suggesting a pattern of substitution, but no strong substitution relationships between other fuel-pairs. These results, which we used in a simulation of tariff change, imply that policies centered on price changes may not be effective in changing consumer behavior unless alternative sources of energy are readily accessible.

Keywords: Agricultural and Food Policy; Food Security and Poverty; International Development (search for similar items in EconPapers)
Date: 2018-10-24
New Economics Papers: this item is included in nep-ene
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Journal Article: Energy demand substitution from biomass to imported kerosene: Evidence from Tanzania (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:miffrp:279913

DOI: 10.22004/ag.econ.279913

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