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Determinants of Household Fuel Choice in Major Cities in Ethiopia

Alemu Mekonnen () and Gunnar Köhlin ()
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Alemu Mekonnen: Department of Economics, Addis Ababa University, Postal: P.O. Box 150167, Addis Ababa, Ethiopia

No 399, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: This paper looks at the fuel choice of urban households in major Ethiopian cities, using panel data collected in 2000 and 2004. It examines use of multiple fuels by households in some detail, a topic not much explored in the household fuel-choice literature in general, and in sub-Saharan Africa in particular. The results suggest that as households’ total expenditures rise, they increase the number of fuels used, even in urban areas, and they also spend more on the fuels they consume (including charcoal but not wood). The results also show that even fuel types such as wood are not inferior goods. The results support more recent arguments in the literature (using Latin American and Asian data) that multiple fuel use (fuel stacking) better describes fuel-choice behavior of households in developing countries, as opposed to the idea that households switch (completely) to other (more expensive but cleaner) fuels as their incomes rise. This study shows the relevance of fuel stacking (multiple fuel use) in urban areas in sub-Saharan Africa. While income is an important variable, the results of this study suggest the need to consider other variables such as cooking and consumption habits, dependability of supply, cost, and household preferences and tastes to explain household fuel choice, as well as to recommend policies that address issues associated with household energy use.

Keywords: Household fuel; urban; Ethiopia (search for similar items in EconPapers)
JEL-codes: D11 O12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr, nep-ene and nep-res
Date: 2009-11-30
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