No abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in IDB-WP-690Copyright © Inter-American Development Bank. This work is licensed under a Creative Commons IGO 3.0 AttributionNonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose, as provided below. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Following a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license. AbstractUnderstanding how energy use evolves at different stages of development is essential for reliable prospective analysis and planning. With that aim in mind, this paper examines the composition of residential energy consumption and its sensitivity to income changes, distinguishing fuel types and accounting for complete heterogeneity of the income coefficient. The focus on domestic energy use allows for the examination of fuel transition under the conceptual framework of the energy ladder and energy portfolio hypotheses, showing the increasing need for modern fuels in the household sector. The results indicate a nonlinear relationship between income and domestic energy consumption that can be attributed to two factors. First, along the income distribution, consumption of modern fuels increases, replacing traditional and transitional fuels until modern fuels drive all of the growth in domestic energy demand. Second, at th...

work is licensed under a Creative Commons IGO 3.0 AttributionNonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose, as provided below. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Following a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license. The paper investigates the determinants of household energy spending and energy budget shares, with a focus on understanding their non-linear relationship with income, and the presence of economies of scale. The analysis is based on a unique, harmonized collection of official household surveys from 13 Latin American countries. This dataset allows distinguishing between expenditures on electricity, domestic gas, and fuel for private transportation, providing a comprehensive distributional view of the energy spending profile of the residential sector. The estimated empirical Engel curves behave similarly; however, the derived income elasticities show marked distinctions by fuel, and their actual values depend on the households' relative position over the income distribution. For electricity, the elasticity tends to increase in income but stabilize at the wealthiest segments. For gas and transport fuel, it decreases under different income paths. In this dataset, the examination returns income elasticities on the (0,1) interval, suggesting that energy commodities are necessity goods. However, the distribution of aggregate energy expenditure needs to be considered. Specifically, there is a great concentration among the richer groups, particularly for transport fuels, where the top quintile gathers more than half of the aggregate spending. The results also indicate economies of scale--for electricity and domestic gas--with respect to family-age composition, and to a lesser extent with respect to dwelling size. In the case of electricity, these economies are more pronounced fo...

The paper investigates the determinants of household energy spending and energy budget shares, with a focus on understanding their non-linear relationship with income, and the presence of economies of scale. The analysis is based on a unique, harmonized collection of official household surveys from 13 Latin American countries. This dataset allows distinguishing between expenditures on electricity, domestic gas, and fuel for private transportation, providing a comprehensive distributional view of the energy spending profile of the residential sector. The estimated empirical Engel curves behave similarly; however, the derived income elasticities show marked distinctions by fuel, and their actual values depend on the households’ relative position over the income distribution. For electricity, the elasticity tends to increase in income but stabilize at the wealthiest segments. For gas and transport fuel, it decreases under different income paths. In this dataset, the examination returns income elasticities on the (0,1) interval, suggesting that energy commodities are necessity goods. However, the distribution of aggregate energy expenditure needs to be considered. Specifically, there is a great concentration among the richer groups, particularly for transport fuels, where the top quintile gathers more than half of the aggregate spending. The results also indicate economies of scale ––for electricity and domestic gas–– with respect to family-age composition, and to a lesser extent with respect to dwelling size. In the case of electricity, these economies are more pronounced for richer households. These results join the previous literature in emphasizing the relevance of accounting for household demographic and socioeconomic trends for energy management.

We examine how the composition of residential energy consumption and its sensitivity with respect to income changes. The paper characterizes the energy transition, analyzing the behavior of income elasticity of energy demand along the economic development stages by fuel types. The results indicate a nonlinear relationship between income and domestic energy consumption that can be explained by two factors. First, along the income distribution, consumption of modern fuels increases, replacing traditional and transitional fuels until modern fuels drive all of the growth in domestic energy demand. Second, at the highest income levels, income elasticity starts to decrease, leading to concavity in energy consumption. That is, the income elasticity of residential energy demand follows an inverse U-shape along the world income distribution. This finding suggests that at high income levels, residential energy consumption shows satiation and net energy-saving effects.