CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

Abstract: This paper provides a joint analysis of multiple fuel types and use choices and explores the socio-demographic and housing characteristics that affect household fuel use decisions. Using household survey data from urban Ethiopia, this paper estimates a mixed multiple discretecontinuous extreme value (MMDCEV) model. The results indicate that households with a female head are more likely to combine traditional biomass fuels (firewood and charcoal) and electricity for different uses, while households with less-educated heads, larger families, and poorer living conditions (fewer rooms) tend to rely on traditional biomass fuels. The results also show that households with an individual electricity meter are significantly less likely to use charcoal. Further, the results show that the satiation effect from increased use of a fuel is relatively higher for firewood and lower for electricity. The findings in this paper can be useful to inform energy policy, including more effective targeting of subsidies for liquefied petroleum gas (LPG) purchases and private electricity meter installations, and for interventions that promote adoption of improved biomass cookstoves.

Keywords: Energy expenditure; fuel choice; fuel substitution; multiple fuel use

JEL-codes: C25; D13; O13; Q23; Q42; R21

33 pages, March 27, 2020

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