Energy Elasticity in India: An Empirical study with Unit level Household Data
DOI:
https://doi.org/10.1956/jge.v15i2.578Keywords:
Households Consumption Expenditure, Elasticity, Energy.Abstract
In the present study an attempt has been made to estimate the responsiveness of prices and household expenditure on consumption of energy for cooking and lighting at household level in rural and urban areas of All India. Household level energy elasticities are estimated for the rural and urban areas with the help of dummy variable regression approach by using NSSO 66th quinnquenial rounds of unit level data.. The results reveal the fact that average expenditure recorded on energy for cooking and lighting in urban areas is higher than in rural areas at all India level. Majority of the households are using dirty fuel for cooking in rural areas while in urban areas clean fuel i.e. LPG is used for cooking. The expenditure on energy for cooking and lighting at household level is inelastic. The marginal budget share in rural and urban areas is the same. Result reveal the fact that hundred percent increase in prices of energy for cooking and lighting will increase the expenditure of households in rural region more than in urban region.
References
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Reddy, B S., (2004), “Economic and Social Dimensions of Household Energy Use: Case Study of Indiaâ€, IGIDR, Mumbai, India
Ross W., (1976), “Estimation of Household Demand Responses using Cross- Section Data: A System Interpretation of Podder’s Resultâ€, Working Paper No. SP-02, A joint Study by the Australian Bureau of Statistics, The Industries Assistance Commission, the Department of Labor and Immigration and the department of Manufacturing Industry, Melbourne, Australia.
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Shahabuddin Q., (1989), “Pattern of Food Consumption in Bangladesh: An Analysis of Household Expenditure Survey Dataâ€, The Bangladesh Development Studies, Vol. 17, No. 3, pp. 101-117.
Smith Kirk, R, Michael G Apte, Ma Yuqing, Wathana Wongsekiarttirat and Ashwin Kulkarni (1994), “Air Pollution and the Energy Ladder in AsianCitiesâ€, Energy, Vol 19, No 5, pp 587-600.
Talukder, R. K., (1993), “Patterns of Income Induced Consumption of Selected Food Items in Bangladeshâ€, The Bangladesh Development Studies, Vol. 21, No. 1, pp. 41-53.
Upendar, M. (1999), "Estimate of Expenditure Elasticities of Demand Based on Time-series Data" Finance India, XII( 3), September 1999, pp. 677-686.
Ali, M S, (1985), “Household Consumption and Saving Behaviour in Pakistan: An Application of the Extended Linear Expenditure Systemâ€, The Pakistan Development Review Vole. XXIV No. 1 pp 23-37
Asaduzzaman M., Douglas F. Barnes and Shahidur R. Khandker, (2010),“Restoring Balance:Bangladesh’s Rural Energy Realities†, World Bank working Paper no 181, Washington, DC
Barnes, D. and Qian, L. (1992) Urban Interfuel Substitution, Energy Use and Equity in Developing Countries: Some Preliminary Results, Mimeo, World Bank, Washington DC.
Brown, A. and A. Deaton, (1972), "Survey in Applied Economics: Models of Consumer Behaviour," The Economic Journal, Vol. 82, No. 328, December 1972, pp.1145-1228.
Burney N. A. and A. H. Khan, (1991), “Household Consumption Patterns in Pakistan: An Urban-Rural Comparison Using Micro Dataâ€, The Pakistan Development Review, Vol. 30, No. 2 , pp. 145-171
Dutt, G and N Ravindranath, (1993), “Bioenergy: Direct Applications in Cooking†in Johansson, Thomas B, Henry Kelly, Amulya K N Reddy and Robert H Williams (eds), Renewable Energy: Sources for Fuels and Electricity, pp 653-98, Island Press, Washington DC.
Eberhard, A. and van Horen, C., (1995), “Poverty and Power: Energy and the South African Stateâ€, Pluto Press, East Haven, Connecticut.
Energy, (2013), 12th Five Year Plan Hackathon, Government of India, Planning Commission, Government of India, planningcommission.gov.in/hackathon/Energy.pdf view on 19/10/2014.
ESMAP, (1994), “Ecuador: Energy Pricing, Poverty and Social Mitigationâ€, Report No. 12831- EC, Energy Sector Management Assistance Program.
Gundimeda H. And G. Kohlin (2006), “Fuel Demand Elasticites for Energy and Environmental Policies Indian Sample Survey Evidence†Working Paper 9/2006, Madras School of Economics, Chennai, India.
Gupta, D. B. (1968), "A Comparison of Consumption Patterns Uttar Pradesh and Madras, A Study of Inter Regional Variations With Reference to India," Indian Economic Review, Vol. III (New Series), pp. 129-146.
Gupta, D. B. (1973), "Consumption Pattern in India," Tata McGraw Hill Publishing Company Ltd., New Delhi.
Hosier, R. and Kipondya, W., (1993), “Urban household energy use in Tanzania Prices, substitutes and poverty†Energy Policy, 21, pp. 454-473.
Iyengar, N. S. and L. R. Jain, (1974), “A method of estimating income distributionsâ€, Economic and Political Weekly, Vol. IX, No. 51, pp. 2103-2109
Iyengar, N. S., (1960), “On a method of computing the Engel elasticities from concentration curvesâ€, Econometrica, Vol. 28, No. 4, pp. 882-891.
Iyengar, N. S., (1964), “A consistent method of estimating the Engel curve from grouped survey dataâ€, Econometrica, Vol. 32, No. 4, pp. 591-618.
Iyengar, N. S., (1967), “Some estimates of Engel elasticities based on National Sample Survey dataâ€, Jour.Roy. Stat. Soc., Series A, Vol. 130, Part 1, pp. 84-101.
Jain L. R., (1983), “Effects of Household Size on Household Expenditure Pattern: An Application of an Addilog Engel Model†SankhyÄ: The Indian Journal of Statistics, Series B (1960-2002), Vol. 45, No. 3, pp. 431-446.
Klein, L. R., and H. Rubin, (1947), “A Constant Utility-index of the Cost of Livingâ€, Review of Economic Studies, Vol. 15, pp 84-89..
Laxmi V., J. Parikh, S. Karmakar and Pramod Dabrase (2003), “Household energy, women’s hardship and health impacts in rural Rajasthan, India: need for sustainable energy solutionsâ€, Energy for Sustainable Development, Volume VII, No. 1, pp 50-68.
Leach, G (1992), “The Energy Transitionâ€, Energy Policy, Vol 20, No 2, pp 116-23.
NSSO, (2001), “Consumption of some important commodities in Indiaâ€, National Sample Survey Organization, Ministry of Statistics and Program Implementation, Govt. of India.
NSSO, (2005), “Household Consumer expenditure in Indiaâ€, National Sample Survey Organization, Ministry of Statistics and Program Implementation, Govt. of India.
NSSO, (2007), “Household Consumption of Various Goods and Services in Indiaâ€, 2004/05 National Sample Survey Organization, Ministry of Statistics and Program Implementation, Govt. of India.
NSSO, (2008), “Household Consumer expenditure in 2006/07â€, National Sample Survey Organization, Ministry of Statistics and Program Implementation, Govt. of India.
NSSO, (2010), “Note on Sample Design and Estimation Procedure of NSS 66th Roundâ€, National Sample Survey Organisation, Survey Design Research Division, March.
NSSO, (2011), “Level and Pattern of Consumer Expenditure 2009-10â€, National Sample Survey Organization, Ministry of Statistics and Program Implementation, Government of India.
Pachauri, S and D Spreng (2004), “Energy Use and Energy Access in Relation to Povertyâ€, Economic and Political Weekely, Vol 39, No 3, pp 271-278.
Reddy, Amulya Kumar N and B Sudhakara Reddy, (1994), “Substitution of Energy Carriers for Cooking in Bangaloreâ€, Energy – The International Journal, Vol 19, No 5, pp 561-72.
Reddy, B S (2003), “Overcoming the Energy Efficiency Gap in India’s Household Sectorâ€, Energy Policy, Vol 31, No 11, pp 1117-27.
Reddy, B S., (2004), “Economic and Social Dimensions of Household Energy Use: Case Study of Indiaâ€, IGIDR, Mumbai, India
Ross W., (1976), “Estimation of Household Demand Responses using Cross- Section Data: A System Interpretation of Podder’s Resultâ€, Working Paper No. SP-02, A joint Study by the Australian Bureau of Statistics, The Industries Assistance Commission, the Department of Labor and Immigration and the department of Manufacturing Industry, Melbourne, Australia.
Sathaye, J and S Tyler, (1991), “Transitions in Household Energy Use in Urban China, India, the Philippines, Thailand, and Hong Kongâ€, Annual Review of Energy and the Environment, Vol 16, pp 295-335.
Shahabuddin Q., (1989), “Pattern of Food Consumption in Bangladesh: An Analysis of Household Expenditure Survey Dataâ€, The Bangladesh Development Studies, Vol. 17, No. 3, pp. 101-117.
Smith Kirk, R, Michael G Apte, Ma Yuqing, Wathana Wongsekiarttirat and Ashwin Kulkarni (1994), “Air Pollution and the Energy Ladder in AsianCitiesâ€, Energy, Vol 19, No 5, pp 587-600.
Talukder, R. K., (1993), “Patterns of Income Induced Consumption of Selected Food Items in Bangladeshâ€, The Bangladesh Development Studies, Vol. 21, No. 1, pp. 41-53.
Upendar, M. (1999), "Estimate of Expenditure Elasticities of Demand Based on Time-series Data" Finance India, XII( 3), September 1999, pp. 677-686.
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Published
01.07.2019
How to Cite
Pandey, A. and Dixit, A. (2019) “Energy Elasticity in India: An Empirical study with Unit level Household Data”, Journal of Global Economy, 15(2), pp. 73–82. doi: 10.1956/jge.v15i2.578.
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