Fuel switching in Harare: An almost ideal demand system approach

In urban areas several energy choices are available and the amount of (a given type of) fuel consumed is based on complex household decision processes. This paper analyzes urban fuel (particularly firewood) demand in an energy mix context by means of an Almost Ideal Demand System based on a survey carried out among 500 households in Harare in 2003. Using a multi-stage budgeting approach, the model estimates the share of energy in total household expenditure and the shares of firewood, electricity and kerosene in total energy expenditure. Using the model results simulations show that the main policy handles to reduce the demand for firewood and to mitigate environmental degradation such as deforestation include decreasing prices of alternative fuels, notably kerosene. Moreover, in the long run sound economic policy will positively impact on the energy budget whereas education and the degree of electrification will contribute to a reduction of the use of firewood.