The demand for Kerosene and per capita income in Ethiopia

Abstract

The Per capita income hou loga func total kerosene consumption is income elastic and the kero se in per capita income will result in in d con ulation is growing rapidly. It is estimated that hou growing at the rate of 5.9% per annum. urba 900 m 3 in 2010, 457,190 m 3 m 3 i 0. This gen are and contrast thou urce among bec e look at the demand elasticity of price and income and analyse the effect of change in price and income on consumption of different househ d fuels. Abstract demand for kerosene is growing at the rate 5.6% per annum. and population growth are determining factor that can directly affect the demand for sehold kerosene fuel in Ethiopia. Kerosene consumption is a log log (double rithm) non linear function of per capita income through time. It is an ideal demand tion. The demand for elasticity coefficient is 8.9 in Ethiopia. This indicates that as income increase sene consumption increases, a 1% increa 8.9% increase in total kerosene consumption, i.e. more than a proportionate increase emand for kerosene. Urban population is a limiting factor for kerosene sumption in Ethiopia. Urban pop urban population growth at the rate of 4.1% per annum during the last 15 years. The study tries to forecast demand for kerosene in 2005-2020. Between 1991-2004, sehold kerosene demand has been Forecasting of the demand for kerosene was based on econometric model. The total n kerosene demand will be 275,470 m 3 in 2006, 346, in 2015 and 594,166 m 3 in 2020. The Addis Ababa kerosene demand will be 111,420 n 2006, 134,930 m 3 in 2010, 168,400 m 3 in 2015 and 204,030 m 3 in 202 study attempts to overview the demand and supply of household fuels in Ethiopia, in eral, and commercial fuels, in particular. We will also comp nominal prices and the amount of energy per unit cost for important fuels. Even gh fuel wood has the lowest quality, it is the cheapest energy so household fuels and that is why poor households preferred to consume it. Kerosene omes the most expensive fuel than wood as well as charcoal. W ol 1 The final version of this article was submitted in November 2006.