Households&rsquo; Energy Demand in Ondo State&comma; Using Almost Ideal Demand System &lpar;AIDS&rpar; Approach&period;

Olubokun; Sanmi; Agbede; Moses Oyeyemi; Aladejana; Saheed Aliu

Households’ Energy Demand in Ondo State, Using Almost Ideal Demand System (AIDS) Approach&period;

Olubokun, Sanmi, Agbede, Moses Oyeyemi AND Aladejana, Saheed Aliu

Abstract

The study examined households’ energy demand in Ondo State between January 2016 to February 2017 while the impact of price and income elasticity of the consumer on their energy demand was also investigated. Almost Ideal Demand System (AIDS) was applied with stratified random sampling technique for empirical analysis. The study examined 223 responses through primary data generated on usage of energy products. The findings showed that electricity (0.98) and kerosene (0.94) are necessities since their coefficients were less than 1. The result further established that Diesel (1.01), Petrol (1.02) and Gas (1.01) are luxuries since their elasticities are greater than 1. The findings revealed that estimated expenditure elasticities were all positive and statistically significant at 5% significant level, indicating that all the selected energy products are normal goods. The study discovered that apart from the major occupations of the respondents, other households’ demographic variables were not significant in determining energy demand. Therefore, the study recommended that policy-makers should consider variations in the coefficients of elasticities of each energy product in making policy decisions

Keywords

EnergyHouseholdsDemandAIDSElasticities

References

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Households&rsquo; Energy Demand in Ondo State&comma; Using Almost Ideal Demand System &lpar;AIDS&rpar; Approach&period;

Abstract

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