An Econometric Analysis of Fuelwood Consumption in Sub-Saharan Africa

Abstract

Four models are estimated to examine the consumption of fuelwood in selected countries of Sub-Saharan Africa from 1970 to 1990. Using a two-stage least squares estimation technique, we use the models to analyze the effects of income and price on fuelwood demand. Variables included in the models are income, price, and precipitation with a dummy variable based on level of development. The best model yields an income elasticity of 0.39 and a price elasticity of −0.28, indicating that fuelwood is a superior, normal good. Attending to the mounting concerns about fuelwood depletion in Sub-Saharan Africa, we feel the results provide insights for the formulation of effective energy policies. Specifically, policy measures that simultaneously address household income and fuel price are required. Increasing household income, directly with income supplements or indirectly with the provision of energy-efficient cookstoves, has the potential to decrease fuelwood consumption. Similarly, price reforms that force the price of energy to reflect its real economic cost encourage more efficient consumption.