Research Article Open Access

Economic Analysis of Household Energy Use: A Rural Urban Case Study of Abia State, Nigeria

Abstract

The study investigated the household energy use between the urban and rural areas of Umuahia North local government area; Abia State Nigeria. Stratified sampling technique was used to select the sample size of 120 respondents (60 from the urban areas and 60 from the rural areas). A set of pretested and structured questionnaire was used in data collection. The result showed that urban households utilized modern domestic energy types (LPG, kerosene and electricity) than rural households. The result of the multiple regression analysis with semi log as the lead equation showed that the critical and significant determinants of urban domestic energy use include household income, occupation of respondents, quantity of energy and cost of substitute energy. The combined effect of all the variables explained 66.67% of the total variation in urban domestic energy use. The result also showed that the critical and significant determinant of rural domestic energy use include household income, household size, occupation of spouse, quantity of energy and cost of substitute energy. The combined effects of all these variables explained 83.3% of the total variation in the rural domestic energy expenditure. The own price elasticity of demand showed mild elastic coefficient for charcoal (-1.2), unitary elastic for fuel wood (1.0), kerosene (1.0), LPG (1.1) and inelastic for electricity (0.2) for urban respondents. The own price elasticities for rural respondents showed inelastic coefficient for charcoal (-0.8), fuelwood (-0.7), kerosene (0.5), LPG (-0.6) and mild elastic coefficient for electricity (-1.2). The result of the cross elasticity of demand showed that the domestic energy types are close substitutes to each other in both rural and urban areas. It was therefore recommended that government should further subsidize the energy prices and provide basic facilities for the supply and distribution chain to make these energy types available and affordable.

CO Anyiro, Ezeh CI, Osondu CK and GA Nduka

To read the full article Download Full Article | Visit Full Article