Household energy consumption behaviors in developing countries: A structural decomposition analysis for Brazil

Abstract

Many studies have discussed the links between household income growth and energy consumption. However, the analysis of impacts on household consumption behavior and its effects on the energy sector has not yet been explored in significant depth for developing countries. Thus, this paper proposes an input-output structural decomposition analysis methodology for identifying the main determining factors for variations in energy consumption in a developing country, according to income class, energy source, and household consumption basket composition. The methodology was applied to analyze the repercussions of recent income growth in Brazil from 2002 to 2008. The structural decomposition analysis results showed an overall upsurge in per capita direct energy consumption, together with a significant increase in the energy embedded in goods and services consumed by Brazilian households. The methodology was applied to analyze the repercussions of recent income growth in Brazil from 2002 to 2008. The results showed that the distribution of energy consumption by income class accompanied the reduction of income inequality. Besides, the socioeconomic development process caused significant changes in household energy consumption patterns, such as increased electrification and access to more modern cooking sources, such as LPG, and public transport services for low-income families. Finally, the study recommends developing countries to use technical detailed structural models with a realistic representation of intersectoral relations and household behavior per income class, in order to improve their energy planning and policymaking focused on sustainable development.