Energy Demand Substitution from Biomass to Imported Kerosene: Evidence from Tanzania

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October 20, 2018 - Author: , , and Titus Awokuse

Michael Olabisi, David L. Tschirley, David Nyange and Titus Awokuse. 2018. Energy Demand Substitution from Biomass to Imported Kerosene: Evidence from Tanzania. Feed the Future Innovation Lab for Food Security Policy Research Paper 117. East Lansing: Michigan State University

ABSTRACT
We analyze domestic household energy demand and use patterns in Tanzania, using a detailed household survey of purchase transactions, a multivariate probit model, and the QUAIDS modeling framework. The main fuel sources that we study are kerosene, charcoal, and firewood. These three accounted for 96.5% of spending on energy by households. Charcoal and firewood are used for cooking while kerosene is used for both lighting and cooking. Kerosene is almost exclusively imported, while charcoal and firewood are produced domestically. These fuel sources are important, given the impacts of wood harvesting on the environment and kerosene imports on public finances. We find a statistically significant response in kerosene demand to charcoal prices, suggesting a pattern of substitution, but no strong substitution relationships between other fuel-pairs. These results, which we used in a simulation of tariff change, imply that policies centered on price changes may not be effective in changing consumer behavior unless alternative sources of energy are readily accessible.

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Tags: charcoal, cooking fuel source, energy, firewood, fsg research paper, fsp research paper, kerosene, policy research and capacity building, tanzania


Related Topic Areas

Tanzania


Authors

Michael Olabisi

Michael Olabisi
517-432-6656
olabisim@msu.edu

David L. Tschirley

David L. Tschirley
517-355-0134
tschirle@msu.edu

David Nyange

David Nyange
+255-754-272-573
nyange@msu.edu

Titus O. Awokuse

Titus O. Awokuse
517-355-4567
awokuset@msu.edu


For more information visit:

Feed the Future Innovation Lab for Food Security Policy
Food Security Group

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