ERF 26th Annual Conference
Energy Expenditure in Egypt: Empirical Evidence Based on a Quantile Regression Approach
No.
ERF26_57
Publisher
ERF
Date
August, 2020
Topic
C1. Econometric and Statistical Methods and Methodology
D1. Household Behavior and Family Economics
Q4. Energy
C2. Single Equation Models
Reduction in energy consumption at the individual scale leads to a significant reduction in energy and carbon emissions at the country scale. This paper investigates the key factors affecting household energy expenditure in Egypt. Based upon the latest 2015 Egyptian HIECS Survey, we develop a quantile regression model with an innovative variable selection approach via Adaptive Lasso Regularization technique (Alasso) to untangle the spectrum of household energy expenditure. Unsurprisingly, income, age, household size, housing size, and employment status are salient predictors for energy expenditure. Housing characteristics have a moderate impact, while socio-economic attributes have a much larger one. The largest variations in household energy expenditures in Egypt are mainly due to variations in income, household size, and housing type. Our findings document substantial differences in household energy expenditure, originating from the opposite tails of the energy expenditure distribution. This outcome highlights the added value of applying quantile regression methods in examining the determinants of household energy expenditure. Our empirical results have various policy implications regarding residential energy efficiency and carbon emissions reduction in Egypt. In particular, they suggest that targeting policies toward specific households may improve energy efficiency policy effectiveness, and provide a gateway to instigate low energy instruments tailored to high energy consumers.
Research Fellows
Fateh Belaïd
Full Professor of Economics, Lille Catholic University
Authors
Christophe Rault
Full Professor of Economics, University of Orléans