Demand for cooking fuels in a developing country. To what extent do taste and preferences matter?

Working Paper 243
Wisdom Akpalu, Isaac Dasmani and Peter B. Aglobitse
Publication date: 
September, 2011
Energy Policy, Elsevier, 39 (10), 6525-6531

Overreliance on biomass energy, such as firewood and charcoal, for cooking in developing countries has contributed to high rates of deforestation and resulted in substantial indoor pollution which has negatively impacted the health of many individuals. However, the effectiveness of public policies aimed at encouraging households to switch to cleaner fuels, such as liquefied petroleum gas (LPG) and kerosene, hinges on the extent to which they are mentally committed to specific fuels. Using data on four cooking fuels (charcoal, firewood, LPG, and kerosene) from the Ghana living standards survey, we found strong evidence that the most preferred fuel is LPG, followed by charcoal, with kerosene the least preferred. In addition, with the exception of kerosene that has price-elastic demand, the price elasticities of demand for the fuel types examined are inelastic. This finding suggests the so-called fuel-ladder is not robust.

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