An Economic Assessment of Energy Poverty and Households Welfare in Ghana

Kwame Yeboah ,Illiasu Zakaria ,E.p Amaning ,Caleb Kwasi Owusu

doi:10.7176/jesd/11-16-01

Abstract

This study sought to investigate the effects of household socio-economic factors on energy poverty in Ghana. Strong evidence points to the fact that energy is a driver of economic growth, hence, the presence of energy poverty is a major barrier to achieving the development objectives of any country. A binomial logistic model was used to analyse the effects of parametric factors on energy poverty. Data of 16,048 households from the Ghana Living Standards Survey 6, a nationally representative survey, served as the basis for the logistics analysis. The results showed that the energy poverty rate in Ghana stands at 38% and households spend around 22% of income on modern energy forms. In addition, energy poverty is more prevalent in rural areas with them being 5.7 times more likely to be energy poor. Also, the results indicated that determinants including age and household size had a negative effect on energy poverty while a higher level of education, income, and welfare had non-decreasing effects on energy poverty. The study concludes that a high welfare level reduces the likelihood that a household is energy poor. To close the disparity between the rural and urban areas with regards to energy access, development of off-grid energy schemes should be implemented largely in rural areas. Keywords: Energy Stacking, Logistic Regression, Energy Poverty, Households Welfare. DOI: 10.7176/JESD/11-16-01 Publication date: August 31 st 2020

Highlights

Energy plays a key role as an input for the production of goods and services necessary for satisfying needs and wants of microeconomic actors and ensuring human welfare
4.1 Extent of energy poverty in Ghana Energy poverty levels currently stand at 38% of the population of Ghana based on GLSS 6 data
The interesting find is that energy poverty is a rural problem as rural areas 59% prevalence of energy poverty amongst households as compared to just 12% in urban areas

Summary

Introduction

Energy plays a key role as an input for the production of goods and services necessary for satisfying needs and wants of microeconomic actors and ensuring human welfare. Energy is a key driver for economic activity from transportation to mining, healthcare to education, electricity production, services provision etc. As such access to energy-efficient, sustainable and affordable forms of energy has a high impact on economic activity. Other researchers have defined energy poverty as the "inability to purchase affordable warmth" (Bouzarovski, 2017). These definitions point to reliability and quality of access to energy services necessary to carry out basic need functions and sustainable development

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Conclusion