Residential energy demand elasticity in Ghana: an application of the quadratic almost ideal demand systems (QUAIDS) model

Figures & data

Table 1. Summary characteristics of households¹

Variable	Category	All (%)	Rural	Urban
Location	Rural %		48.18	51.82
	Urban %
Sex of household head	Male %	66.72	69.03	64.57
	Female %	33.28	30.97	35.43
Poverty status	Very Poor %	6.74	13.04	0.88
	Poor %	11.98	19.80	4.71
	Non Poor %	81.27	67.15	94.40
Age Of Household head	Age in mean	46	46.85	44.7
Household size	Size in mean	4	4.6	3.6
Employment status	Employed %	80.24	79.84	80.61
	Unemployed %	19.76	20.16	19.39
	Male (employed) %	83.0	82.6	83.6
	Female (employed) %	74.55	73.76	75.19
	Male (unemployed) %	16.9	17.4	16.4
	Female (unemployed) %	25.45	26.24	24.81
Total energy expenditure		589.95	423.89	744.38

Source: Author’s Calculation Based On GLSS7 (2016/2017)

Table 2. Access to energy for cooking (%)

	Very Poor	Poor	Non-Poor	Rural	Urban	Male Household Head	Female Household Head	National
None	1.36	1.22	6	3.51	6.6	7.02	1.29	5.11
Wood	90.5	76.34	26.76	64.42	11.49	37.98	35.02	37
Charcoal	5.97	19.61	39.01	22.1	45.85	30.36	42.52	34.41
Gas	0.41	1.37	27.56	8.49	35.7	23.65	20.45	22.59
Electricity	0	0	0.26	0.27	0.16	0.27	0.08	0.21
Kerosene	0	0	0.09	0.04	0.11	0.07	0.08	0.07
Others	1.76	1.91	0.32	1.18	0.06	0.64	0.55	0.61

Source: Author’s Own Calculation Based On GLSS7 (2016/2017)

Table 3. Household access to fuel for lighting (%)

Category	Kerosene Lamp	Gas Lamp	Candles/ Flashlight	Firewood	Electricity	Solar Energy	Others
Very Poor	0.979	0.000	26.434	0.699	67.972	1.259	2.578
Poor	1.700	0.000	18.702	0.386	76.971	1.700	0.534
Non-Poor	0.738	0.000	7.510	0.080	90.877	0.443	0.349
Rural	1.198	0.019	15.092	0.329	81.295	1.237	0.816
Urban	0.568	0.000	5.534	0.000	93.544	0.106	0.247
Male Household Head	0.541	0.000	9.639	0.153	88.391	0.707	0.562
Female Household Head	1.527	0.028	11.046	0.167	86.261	0.527	0.440
Total	0.869	0.009	10.108	0.157	87.681	0.647	0.174

Source: Author’s Calculation Based On GLSS7 (2016/2017)

Table 4. Summary statistics of the average price of energy by location of household

	National		Rural		Urban
Price Variable	Mean (GHC)	Std. Dev.	Mean(GHC)	Std. Dev.	Mean(GHC)	Std. Dev
Traditional fuel	50.55	103.23	46.25	82.71	54.54	119.06
Gas (LPG)	17.78	63.73	7.00	40.32	27.79	78.22
Electricity	142.68	207.34	82.31	144.16	198.81	238.97
Kerosene	0.825	7.82	1.15	9.41	0.52	5.96
Total Energy	211.82	253.66	136.71	183.56	281.67	287.61

Source: Author’s Calculation Based On GLSS7 (2016/2017)

Table 5. Summary statistics of household energy expenditure shares by selected demographics

Energy Fuel	Rural	Urban	Very Poor	Poor	Non Poor	Male	Female
Traditional fuel	0.408	0.29	0.499	0.472	0.316	0.322	0.397
Gas (LPG)	0.026	0.098	0.00	0.004	0.077	0.065	0.059
Electricity	0.555	0.609	0.495	0.512	0.6	0.607	0.533
Kerosene	0.12	0.004	0.006	0.012	0.007	0.006	0.011

Source: Author’s Calculation Based On GLSS7 (2016/2017)

Table 6. Multivariate probit estimate

	Dependent variable
Explanatory variables	FCO	LPG (gas)	Electricity	Kerosene
Sex of Household Head (Male)	−0.401***	0.077*	0.173***	−0.284***
	(0.028)	(0.032)	(0.03)	(0.051)
Age (HH)	0.005***	−0.008***	−0.008***	0.005***
	(0.001)	(0.001)	(0.001)	(0.002)
Household Size	0.098***	−0.035***	−0.039***	−0.004
	(0.005)	(0.06)	(0.005)	(0.01)
Location of Household (urban)	0.236***	0.881***	0.297***	−0.2***
	(0.026)	(0.032)	(0.028)	(0.05)

***p < 0.001 Standard Error in parenthesis

Source: Author’s own calculation based on data from GLSS 7

Table 7. Marginal effects of coefficients in multivariate probit model

	Dependent variable, probability of purchasing fuel
Explanatory variables	FCO	LPG (gas)	Electricity	Kerosene
Sex of Household Head (Male)	−0.143***	0.019***	0.047***	−0.018***
Age (HH)	0.002***	−0.002***	−0.002***	0.000***
Household Size	0.035***	−0.009***	−0.01***	−0.001
Location of Household (urban)	0.09***	0.215***	0.091***	−0.013***

***p < 0.001

Source: Author’s own calculation based on data from GLSS 7

Table 8. Elasticity estimate for residential energy demand (All households)

	Expenditure elasticity	Change in Price
	Total	FCO	LPG (Gas)	Electricity	Kerosene
Firewood, Charcoal and others (FCO)	0.729***	−0.257***	−0.074***	−0.341***	0.058***
	(0.009)	(0.019)	(0.002)	(0.007)	(0.002)
LPG (Gas)	1.281***	−0.174***	−0.706***	−0.313***	−0.088***
	(0.012)	(0.009)	(0.011)	(0.011)	(0.003)
Electricity	1.051***	−0.199***	−0.039***	−0.795***	−0.018***
	(0.003)	(0.003)	(0.001)	(0.004)	(0.00)
Kerosene	0.947***	−0.149***	−0.299***	−0.145***	−0.354***
	(0.019)	(0.021)	(0.033)	(0.015)	(0.077)

***p < 0.001 (Standard errors in parentheses)

Source: Author’s own calculation based on data from GLSS 7

Table 9. Own price elasticity (uncompensated) of energy demand estimate based on selected demographics

Energy type	Location		Sex of household head		Age of household head
	Rural	Urban	Female	Male	≤45	> 45
FCO	−0.513***	−0.037***	−0.325***	−0.217***	−0.226***	−0.290***
	(0.022)	(0.030)	(0.033)	(0.024)	(0.021)	(0.033)
LPG	−0.69***	−0.71***	−0.731***	−0.694***	−0.696***	−0.725***
	(0.019)	(0.013)	(0.011)	(0.016)	(0.016)	(0.012)
Electricity	−0.806***	−0.785***	−0.785***	−0.799***	−0.798	−0.790***
	(0.006)	(0.006)	(0.01)	(0.004)	(0.006)	(0.006)
Kerosene	−0.54***	−0.082	−0.428***	−0.281*	−0.246*	−0.446***
	(0.107)	(0.102)	(0.068)	(0.137)	(0.147)	(0.067)

*p < 0.05, **p < 0.01, ***p < 0.001

Source: Author’s own calculation based on data from GLSS 7

Table 10. Uncompensated elasticities with zero-expenditure adjustments

		Change in Price
	FCO	LPG (Gas)	Electricity	Kerosene
Firewood, Charcoal and others (FCO)	−0.281***	−0.067***	−0.360***	−0.038***
	(0.006)	(0.000)	(0.003)	(0.000)
LPG (Gas)	−0.243***	−0.444***	−0.303***	−0.174***
	(0.003)	(0.002)	(0.003)	(0.001)
Electricity	−0.388***	−0.079***	−0.552***	−0.040***
	(0.005)	(0.001)	(0.006)	(0.001)
Kerosene	0.055***	−0.173***	−0.024***	−0.578***
	(0.001)	(0.000)	(0.001)	(0.001)

***p < 0.001 (Standard errors in parentheses)

Source: Author’s calculation based on data from GLSS 7

Table A11. QUAIDS estimated results

	Gamma				Constant (Alpha)	Linear expenditure (Beta)	Quadratic expenditure (Lambda)	Household location (Eta^1)	Sex of Household Head (Eta^2)	Age of Household Head (Eta^3)
	FCO Fuel Price	Gas Price	Electricity Price	Kerosene Price
FCO. Fuel	0.118***				0.454***	0.001	−0.015***	0.008***	0.006***	−0.000***
	(0.001)				(0.004)	(0.004)	(0.001)	(0.002)	(0.001)	(0.000)
Gas	−0.014***	0.041***			0.16***	−0.096***	0.036***	0.005***	−0.004**	−0.000***
	(0.00)	(0.001)			(0.003)	(0.002)	(0.001)	(0.001)	(0.001)	(0.000)
Electricity	−0.095***	–0.011***	0.113***		0.302***	0.108***	−0.023***	−0.023***	0.000	0.000***
	(0.001)	(0.001)	(0.001)		(0.005)	(0.003)	(0.01)	(0.001)	(0.001)	(0.000)
Kerosene	−0.009***	−0.017***	−0.008***	0.034***	0.083***	−0.013***	0.002***	0.009***	−0.002***	0.000
	(0.00)	(0.00)	(0.00)	(0.001)	(0.002)	(0.002)	(0.00)	(0.001)	(0.001)	(0.00)
Rho (demographic expenditure)
Location (Urban)			−0.639***
			(0.016)
Sex of household head (Male)			0.029***
			(0.013)**
Age of household head			0.000***
			(0.000)

NB: ***, ** and * indicates significance at 0.1%, 1% and 5% respectively; standard errors in parenthesis.

Source: Author’s own calculation based on data from GLSS 7