Modelling required energy consumption with equivalence scales

Yuxiang Ye (), Steven F Koch () and Jiangfeng Zhang ()
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Yuxiang Ye: University of Pretoria
Steven F Koch: University of Pretoria
Jiangfeng Zhang: Clemson University
Authors registered in the RePEc Author Service: John Manuel Luiz

No 123, ERSA Working Paper Series from Economic Research Southern Africa

Abstract: This study proposes an equivalence scale model for required energy consumption at the household level. The proposed approach equivalises actual energy expenditure across households in two steps: estimating an equivalence scale and dividing actual expenditure by the estimated scale for each household. We apply the method in a case study where data on required energy expenditure are not available. Our South African case study results suggest that the energy equivalence scale differs from both income and energy equivalence factors used in developed countries, while the choice of equivalence estimation method has limited impact on energy requirements. As expected in a middle income and highly unequal country, estimates of required energy consumption are well above actual energy expenditure for low- and mid-income households. Given the similarity of results across methods, we are further able to suggest that required energy consumption, where data are not available, can be quickly estimated from expenditure data.

Keywords: Equivalence scale; Semi-parametric; Energy consumption (search for similar items in EconPapers)
JEL-codes: I31 Q40 Q48 (search for similar items in EconPapers)
Date: 2020-02
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Published in ERSA Working Paper Series, February 2020

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