Household Coal Demand in Rural Kazakhstan: Subsidies, Efficiency, and Alternatives

Figures & data

Table 1. Geographic zones of Kazakhstan and their socioeconomic characteristics.

	2002				2012
	Nation-wide	North	South	West	Nation-wide	North	South	West
Number of households in HBS	12000	6060	4440	1500	11633	5412	3640	2611
Urbanization rate, %	50	54	45	50	52	53	53	48
Detached houses, %	42	32	56	37	44	36	54	49

North: January temperature = -14.3°C

Oblasts included: Pavlodar, Akmola, Kostanai, Northern Kazakhstan, Astana, Karagandy, Eastern Kazakhstan

West: January temperature = -6.8°C

Oblasts included: Atyrau, Mangistau, Western Kazakhstan, Aktobe

South: January temperature = -4.6°C

Oblasts included: Almaty, Zhambyl, Southern Kazakhstan, Kyzylorda, Almaty City

Figure 1. Heating systems used in 2002 and 2012 (percent of households, by region).

Figure 2. Heating costs per square meter in 2002 and 2012 (KZT, by region).

Table 2. Nominal consumer energy prices in Kazakhstan (KZT/gigajoule).

	2002	2012	% change	Average annual % change
Coal price	100	324	224	12.5
Electricity price	1078	2686	149	9.6
Natural gas price	203	286	41	3.5
Central heat price	405	656	62	4.9
Consumer price index (2010 = 100)	50.4	131.7	161	10.1
Average household income, inflation adjusted (2010 KZT)	369,547	973,057	163	10.2

*Conversion factors used: (1) heat content of coal is 22.4 MJ/kg for Shubarkol (Karaganda) bituminous coal; (2) 1 kWh = 3.6 MJ; (3) 1 cubic meter of natural gas = 36 MJ; and (4) 1 Gcal = 4185.8 MJ.

Figure 3. Kazakhstan’s major coal basins¹⁵

Table 3. Characteristics of coal-consuming rural households in 2012.

Variable name	Variable description	Mean	Std.
ln real coal expenditures	Log of annual per capita expenditure on coal, KZT	9.41	0.703
ln coal quantity	Log of annual per capita quantity of coal, tons	0.583	0.774
ln coal price	Log of coal price per ton, KZT	8.885	0.255
ln income	Log of annual per capita monetary income, KZT	12.681	0.513
alt_access	Unity if expenditures on central heat or network gas are positive	0.029	0.169
ln area	Log of per capita living area of the dwelling, square meters	2.648	0.553
apartment	Unity if dwelling is an apartment	0.118	0.323
semi-detached	Unity if dwelling is a semi-detached house	0.152	0.359
post_1990	Unity if dwelling was built in 1990 or later	0.161	0.368
rental	Unity if dwelling is tenant-occupied	0.060	0.237
renov	Unity if expenditures on renovations are positive	0.632	0.482
pensioners	Unity if number of pensioners is positive	0.305	0.461
ln HDD	Log of heating degree days	9.082	0.266

Number of observations: 3157.

Table 4. Cross-section model estimation results (2012 household-level data).

Explanatory variable	Coefficient	Robust standard error
ln coal price	–0.503***	0.068
ln income	0.470***	0.022
alt_access	–0.145**	0.061
ln area	0.379***	0.021
apartment	0.043	0.032
semi-detached	0.014	0.029
post_1990	–0.128***	0.029
rental	0.123**	0.048
renov	–0.082***	0.021
pensioners	0.036*	0.022
ln HDD	0.780***	0.066
constant	–8.972***	1.101
Observations	3157
Adjusted R^Citation2	0.479

Note: ***, **, and * indicate 1%, 5%, and 10% levels of significance, respectively.

Table 5. Coal demand elasticity estimates.

Model	Price elasticity	Income elasticity
Panel data model	Short-run: -0. 58	Short-run: 0.37
	Long-run: -1.00	Long-run: 0.64
Cross-section model	-0.50	0.47
Zhang and Kotani’s^Citation12 cross-section model	-0.38	1.00

Table 6. Panel data model estimation results.

Explanatory variable	Coefficient	Standard error
Lagged dependent variable	0.423***	0.131
ln coal price	–0.576***	0. 089
ln income	0. 368***	0. 023
alt_access	0. 263	0. 165
apartment	–0.104	0. 097
semi-detached	–0.053	0. 102
post_1990	0. 153	0. 168
rental	0. 874**	0.367
renov	–0. 401***	0. 071
pensioners	–0.104	0. 087
ln HDD	0. 452***	0. 132
constant	–3.147**	1.230
No. observations	99
No. groups	33
Wald chi^Citation2	1909.16

Note: ***, **, and * indicate 1%, 5%, and 10% levels of significance, respectively.

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