factor influenicing choice of energy sources in rural pakistan
TRANSCRIPT
Factors Influencing Choice of
Energy Sources in Rural Pakistan
Saad Moeen, Asjad Tariq Sheikh,
Saqib Shahzad and Shehryar Rashid
31st Annual General meeting of the Pakistan Society for Development Economists,
Islamabad
19 December, 2015
Plan of Presentation
• Introduction
• Research Question & Objective
• Data
• Methodology
• Results
• Conclusions & Policy Recommendations
Introduction
• Availability of efficient energy sources is an indicator of
standard of living;
• Household’s access to modern energy sources is limited in most
developing countries;
• Sources of energy vary between rural and urban populations,
across income groups, and type of household;
• In Pakistan, households use both modern and traditional sources
of energy for different uses such as lighting, cooking, heating,
and transportation; (Mirza and Kemp, 2009; Jan et al., 2012)
• Households spend 8% of total expenditure on energy (fuel and
lighting) (HIES: 2013-14)
Page 3
Introduction continued
• Pakistan has made significant progress in providing electricity
to villages and the usage of electricity in rural area is limited to
lighting; (Mirza and Kemp, 2009; Jan et al., 2012).
• For cooking and heating, mostly traditional sources are used in
rural areas of Pakistan (Mirza and Kemp, 2009; Jan et al., 2012).
• Use of traditional sources is main cause of indoor air pollution
and many respiratory diseases; (Heltberg et al., 2000; Dewees, 1989; Liu et
al., 2008).
• Two broadly used models
– Energy Ladder Model (Hosier and Dowd, 1987; Leach, 1992; Sathaye and
Tyler, 1991; Smith et al., 1994; Reddy and Reddy, 1994)
– Fuel Stacking Model (Barnes and Qian, 1992; Hosier and Kipondya, 1993;
Davis, 1998; Masera et al. 2000; Heltberg 2005).
Page 4
Research Question & Objective
Research Question:
• Why some households use modern sources while
other use traditional?
• What are the factors that determined their choice
between different sources of energy?
Objective:
• To answer these question using the recently collected
data from rural Pakistan
Data
IFPRI / PSSP’s Rural Household Panel Survey (RHPS)
• 19 Districts (12 in Punjab, 5 in Sindh, and 2 in KPK)
• 1,876 Households (1,180 in Punjab, 487 in Sindh, and
209 in KPK)
• Household Energy Consumption Module
• Household Characteristics
• Community Level Data
• Demographic Characteristics
Types of Energy Sources for Analysis
• Electricity
• Gas (include direct gas connection and LPG)
• Firewood
• Animal/Plant Residue (dung cake and agriculture residue)
• Other sources (kerosene, petrol, diesel, coal etc.)
Energy Usage and Consumption in Rural Pakistan
IFPRI / PSSP’s RHPS Round 3.0 (2014)
0
10
20
30
40
50
60
70
80
90
100
Electricity Natural Gas Firewood Animal/Plant
Residue
Others
Per
cen
tag
e
Energy Usage Energy Consumption
Household Energy Consumption by
Purpose in Rural Pakistan
IFPRI / PSSP’s RHPS Round 3.0 (2014)
0
10
20
30
40
50
60
70
80
90
100
Electricity Natural Gas Firewood Animal/plant
Residue
Others
Per
cen
tag
e
Lighting Cooking Heating
Household Response during Outages/Shortages
IFPRI / PSSP’s RHPS Round 3.0 (2014)
Main Source
of Energy
Alternative source of Energy
No
alternative Electricity Gas Firewood
Animal/plant
residue Others
Gas 20.1 2.21 0 35.41 1.05 41.23
Firewood 16.66 0 7.18 0 70.73 5.42
Animal/Plant
residue 4.6 1.55 0 55.51 29.72 8.62
*Others 17.92 0 0 0 0 82.08
Note: For other sources of energy, the major alternate source is petrol and furnace oil.
Unit Cost of Energy Sources (PKR per MMBtu)
IFPRI / PSSP’s RHPS Round 3.0 (2014)
Gas Firewood Animal/plant residue
0
50
100
150
200
250
300
350
Ru
pee
s p
er M
MB
TU
Household Decision to Choose
Resource of Energy
IFPRI / PSSP’s RHPS Round 3.0 (2014)
Energy Source
Lighting (Electricity) Cooking & Heating
Gas Firewood Animal/plant
residue
Methodology
• Multinomial logit models is appropriate
(McFadden, 1974; Maddala, 2001; Greene,
2008)
• Gas is selected as the base as it is modern and
efficient energy source.
• The Results of model is explain by average
marginal effect and environmental effect of
traditional sources.
Factors determining the decision to adopt
particular source of energy
• Demographic Variables
– Number of dependents, Household head Age, Dummy household head
education, Dummy household gender, Dummy for farm household,
Income Quantile
• Fuel Type Characteristics
– Thermal Value, Number of Females Involved in collecting firewood,
Number of Children Involved in collecting firewood
• Site Characteristics
– Provincial Dummies
• Development Indicators
– Distance to Nearest Market, Dummy for Developed Internal Mouza
Road
Model
The household is assumed to have a utility function of the form:
𝑈𝑖𝑗 = 𝑈(𝑍𝑖𝑗) (1)
Predetermined distribution:
𝑈𝑖𝑗 =𝑉𝑖𝑗 + 𝑒𝑖𝑗 (2)
The deterministic part can be written as:
𝑉𝑖𝑗 = 𝑋𝑖𝛾𝑗 (3)
Where 𝛾𝑗 are parameters, and 𝑋𝑖are explanatory variables; the 𝑒𝑖𝑗is a random
disturbance reflecting intrinsically random choice behavior, measurement or
specification error, or other unobserved attributes of the alternatives.
Model continued
The multinomial logit model is given:
𝑃𝑖𝑗 =exp (𝑋𝑖
`𝛾𝑗)
exp (𝑋𝑖`𝛾𝑗)
3𝑗=0
(4)
Setting 0 = 0, the model can be written as:
𝑃𝑖𝑗 =exp (𝑋𝑖
`𝛾𝑗)
1 + exp (𝑋𝑖`𝛾𝑗)
3𝑗=1
𝑗 = 1,2,3 𝑎𝑛𝑑 𝑃𝑖0 =1
1 + exp (𝑋𝑖`𝛾𝑗)
3𝑗=1
(5)
Which can be estimated using the maximum likelihood estimation method.
Determinants of Energy Sources: Demographic Variables
Variables
Cooking Model Heating Model
Firewood Animal/plant
residue Firewood
Animal/plant
residue
Coefficient Coefficient Coefficient Coefficient
Number of Dependents
0.146** 0.197** 0.103* 0.147**
(0.072) (0.077) (0.061) (0.07)
Household Head Age
-0.025** -0.020** -0.004 0.001
(0.01) (0.01) (0.01) (0.01)
Dummy Household Head
Education
-1.165*** -1.292*** -1.107*** -1.198***
(0.307) (0.305) (0.295) (0.294)
Dummy Household Gender
1.238*** 1.258*** 1.456*** 1.185***
(0.37) (0.40) (0.25) (0.36)
Dummy for Farm Household
1.089*** 1.317*** 1.139*** 1.394***
(0.39) (0.40) (0.36) (0.39)
Determinants of Energy Sources: Fuel Type Characteristics
Variables
Cooking Model Heating Model
Firewood Animal/plant
residue Firewood Animal/plant residue
Coefficient Coefficient Coefficient Coefficient
Thermal Value 0.02 (0.28) 0.325** (0.17)
(0.06) (0.18) (0.14) (0.28)
Number of Females Involved in
collecting firewood
1.891*** 2.125*** 2.273*** 2.545***
(0.48) (0.48) (0.48) (0.47)
Number of Children Involved in
collecting firewood
0.58 0.62 0.96 1.06
(0.55) (0.52) (0.82) (0.79)
Dummy for Second Income
Quintile
-0.656*** -0.618** -0.705* (0.46)
(0.25) (0.27) (0.38) (0.37)
Dummy for Third Income
Quintile
(0.62) -0.759* -0.853* -0.797*
(0.41) (0.45) (0.44) (0.45)
Dummy for Forth Income
Quintile
-1.516*** -1.388*** -1.606*** -1.309***
(0.34) (0.38) (0.43) (0.44)
Dummy for Fifth Income Quintile -1.474*** -1.422*** -1.787*** -1.692***
(0.32) (0.36) (0.38) (0.40)
Determinants of Energy Sources: Site Characteristics and Development Indicators
Variables
Cooking Model Heating Model
Firewood Animal/plant
residue Firewood
Animal/plant
residue
Coefficient Coefficient Coefficient Coefficient
Distance to Nearest Market
0.035** 0.02 0.029** 0.01
(0.02) (0.02) (0.01) (0.01)
Dummy for Developed Internal
Mouza Road
-2.439*** -2.069*** -3.476*** -2.985***
(0.49) (0.50) (0.68) (0.67)
Dummy for Punjab Province
0.64 1.33 0.78 1.42
(1.11) (1.12) (1.06) (1.08)
Dummy for KPK Province
1.904* 1.48 2.654** 1.80
(1.12) (1.13) (1.12) (1.14)
Constant
2.942*** 1.878* 1.888*** 1.37
(0.88) (0.97) (0.73) (0.94)
Variables
Cooking Model Heating Model
Firewood Animal/plant residue Firewood Animal/plant residue
Coefficient Coefficient Coefficient Coefficient
Test Statistics
Observations 2045 2063
Pseudo R2 0.1658 0.226
Log pseudo likelihood -1461 -1388
Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1
Variables Gas Firewood Animal/plant
residue
Number of Dependents -0.009** -0.003 0.012**
Thermal Value 0.005 0.052* -0.056***
Household Head Age 0.001** -0.003*** 0.001*
Dummy Household Head Education 0.064*** -0.028 -0.036**
Dummy Household Gender -0.060** -0.012 0.072*
Dummy for Farm Household -0.066** 0.017 0.048*
Number of Females Involved in collecting firewood -0.097*** 0.012 0.086***
Number of Children Involved in collecting firewood -0.032 0.038 -0.006
Distance to Nearest Market -0.001* 0.003** -0.002
Dummy for Developed Internal Mouza Road 0.116*** -0.131** 0.015
Dummy for Second Income Quintile 0.037*** -0.036 -0.001
Dummy for Third Income Quintile 0.033 0.007 -0.040
Dummy for Forth Income Quintile 0.078*** -0.078** 0.000
Dummy for Fifth Income Quintile 0.069*** -0.059 -0.009
Average Marginal Effects for Cooking
Variables Gas Firewood Animal/plant
residue
Number of Dependents -0.0071** -0.0039 0.0111*
Thermal Value -0.0055 0.0927* -0.0872*
Household Head Age 0.0002 -0.0017** 0.0015**
Dummy Household Head Education 0.0582*** -0.0267 -0.0315*
Dummy Household Gender -0.0546*** 0.0074 0.0472
Dummy for Farm Household -0.0684*** 0.0133 0.0551*
Number of Females Involved in collecting
firewood -0.0970*** -0.0041 0.1011***
Number of Children Involved in collecting
firewood -0.0540 0.0400 0.0140
Distance to Nearest Market -0.0007 0.0026* -0.0018
Dummy for Developed Internal Mouza Road 0.1518*** -0.1549*** 0.0031
Dummy for Second Income Quintile 0.0290 -0.0694** 0.0405*
Dummy for Third Income Quintile 0.0280 -0.0243 -0.0037
Dummy for Forth Income Quintile 0.0691** -0.0937** 0.0245
Dummy for Fifth Income Quintile 0.0759*** -0.0648* -0.0111
Average Marginal Effects for Heating
Variables Gas Firewood Animal/plant
residue
Number of Dependents -* - +*(-) Thermal Value +(-) +* -*(+*) Household Head Age +*(+) -* +*(-*) Dummy Household Head Education +* - -*(+) Dummy Household Gender -* -(+) +*(+) Dummy for Farm Household -* + +*(+) Number of Females Involved in collecting firewood -* +(-) +*(-) Number of Children Involved in collecting firewood - + - Distance to Nearest Market -*(-) + -(-*) Dummy for Developed Internal Mouza Road +* -* +(-*) Dummy for Second Income Quintile +*(+) -(-*) -(-*) Dummy for Third Income Quintile + +(-) - Dummy for Forth Income Quintile +* -* +(-*) Dummy for Fifth Income Quintile +* -(-*) -(-*)
Results
Results
• Firewood is preferred for both cooking and heating, while
plant residue is used for heating;
• Most gas users have better human capital;
• Male headed households tend to use plant residue for cooking
and heating;
• Farm households are less likely to use gas;
• Use of Firewood decreased with more developed mouza roads;
• The household tends to use modern source of energy if they
are educated;
• The household tends to use more gas and less firewood with
higher income.
Results: Health and Environment Effect
Pollutant Name of Pollutant
1 Kg
Firewood
per MMBtu
1 Kg
Animal & Plant
Residue per
MMBtu
Health & Environment Effect
NOX Nitric Oxide &
Nitrogen Dioxide 0.49 0.67
Water Quality Deterioration, Global Warming, Toxic
Chemicals, Visibility Impairment
CO Carbon Monoxide 1.33 27.56 Dull headache, Weakness, Dizziness, Vomiting,
Shortness of breath, Confusion, Blurred vision, Loss
of consciousness
SO2 Sulfur Dioxide 0.06 n/a
Inhalation and TOXIC, Skin and Eye Contact
(CORROSIVE), Ingestion
Effects of Long-Term (Chronic), Exposure,
Carcinogenicity
VOC Volatile Organic
Compound 0.04 1.78
Acetone, Benzene, Ethylene glycol, Formaldehyde,
Methylene chloride, Perchloroethylene, Toluene,
Xylene , 1,3-butadiene
PM Particulate Matter 1.27 2.89 Heart or lung disease, nonfatal heart attacks
irregular heartbeat, aggravated asthma, decreased
lung function, coughing or difficulty breathing
CO2 Carbon Dioxide 460 476 Cardiovascular Effects, Nerve Damage, Asphyxiation
Department for Environment Food & Rural Affairs (UK) and
Global Change Impact Studies Centre: GCISC
Conclusions & Policy Recommendations
• Results indicate that rural households use different sources of energy
simultaneously support fuel stacking model;
• Firewood is preferred source for cooking and heating;
• Traditional energy sources have harmful effects on environment and
human & animal health;
• These effects can be minimized by using controlled appliances;
• There is need to:
– Create awareness for these harmful effect
– Introduce controlled appliances
– Encourage households to use these appliances
• Provision of modern sources of energy would not only be more
efficient but also less harmful to environment and health;
• Policy required for modernization of traditional sources
• Promote efficient market to obtain firewood on competitive prices in
rural area.