Drivers of households’ electricity expenditure in Ghana

Abstract

Worldwide, residential electricity consumption accounts for 30% of total electricity usage. In Ghana, household electricity consumption accounts for over 50% of total electricity generation. Moreover, problems faced in mobilising resources for electricity generation and the need for environmental sustainability calls for effective management of electricity demand by consumers. This requires a thorough understanding of the drivers of household electricity expenditure. The present study examines the drivers of household electricity expenditure in Ghana. Data for the analysis were obtained from the 2005/2006 and 2012/2013 waves of the Ghana Living Standards Survey. Results based on ordinary least squares regression analysis indicate that variation in the log of household annual electricity expenditure is explained by income, stock of electrical appliances, number of rooms, and years of education completed by household head. Other factors such as rural/urban location, employment status of household head, tenancy status, ownership of agricultural land, and ecological zone also exert significant influence on household electricity expenditure. The policy implications of the findings are indicated.