Vol 10, No 3 (2022)
The Effect of Household Income on Cooking Fuel Demand in Ibadan
Moses Agbonah John
Abstract
The recent escalation of cooking gas price in Nigeria raises concerns about how possible the country can achieve substantial transition to cleaner energy use by 2030 as espoused in the Sustainable Development Goals. In addition, the deteriorating economic condition of the country shrinks household income making it more difficult for many households to sustain cooking fuel demand. This study sought to examine the impact of household income on cooking gas demand in Ibadan based on the propositions of the energy ladder hypothesis and the fuel stacking theory. The study used a sample of 127 households in Ibadan and applied linear regression technique based on OLS. There was evidence of fuel stacking rather than a linear progression up the energy ladder as suggested by the energy ladder hypothesis. Moreover, the study established that cooking gas obeys the law of demand which means that it is a normal good. However, the demand for cooking gas is found to be inelastic with own price, but elastic with respect to price of alternative cooking fuels. The study recommends an improvement in Nigerian’s economic wellbeing through better macroeconomic policies and solutions to rising gas prices as means of improving cooking gas affordability for Nigerian households.
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Keywords
Energy ladder; Fuel stacking; Demand; Prices.
Publication information
Volume 10, Issue 3
Year of Publication: 2022
ISSN: 1857 - 8721
Publisher: EDNOTERA
How to cite
John M. A.: The Effect of Household Income on Cooking Fuel Demand in Ibadan. Journal of Applied Economics and Business, Vol 10, No. 3, 46-67. (2022)