Working paper abstract

#2013-047

Switching off or switching source: energy consumption and household response to higher energy prices in the Kyrgyz Republic

Franziska Gassmann & Raquel Tsukada

Access to energy is fundamental to improving quality of life and is a key imperative for economic development" (Energy Poverty Action). This is particularly true in Central Asia where winters are harsh and long. Changes in energy prices affect the purchasing power of households, hitting the poor in particular. The impact very much depends on a household's energy basket and the available strategies for switching to alternative energy sources. Using data from the Kyrgyz Integrated Household Survey (KIHS) 2011, this paper analyzes the profile of household energy consumption and the impact of electricity tariff increases on the probability that households would switch to alternative energy sources. Results suggest that households would respond to an electricity price increase by increasing consumption of fuels: households would tend to move away from electricity-only heating source towards the use of stove-only.

Keywords: energy, household consumption, Central Asia, Kyrgyz Republic

JEL Classification: H23, I38, P22