Modelling required energy consumption with equivalence

2 December 2022
Publication Type: Working Paper
JEL Code: I31, Q40, Q48

This study proposes an equivalence scale model for required energy consumption at the household level. The proposed approach equivalises actual energy expenditure across households in two steps: estimating an equivalence scale and dividing actual expenditure by the estimated scale for each household. We apply the method in a case study where data on required energy expenditure are not available. Our South African case study results suggest that the energy equivalence scale di ers from both income and energy equivalence factors used in developed countries, while the choice of equivalence estimation method has limited impact on energy requirements. As expected in a middle income and highly unequal country, estimates of required energy consumption are well above actual energy expenditure for low- and mid-income households. Given the similarity of results across methods, we are further able to suggest that required energy consumption, where data are not available, can be quickly estimated from expenditure data. Required energy consumption, Equivalence scale, Energy poverty, Semiparametric regression.

Working paper 809
1 February 2020
Journal: The Energy Journal
30 November 2022