Income and energy use in Bangladesh: A household level analysis

Abstract

We examine how energy use at the household level moves with income in Bangladesh. Using the 2010 wave of Bangladesh Household Income and Expenditure Survey data, our analyses indicate a U-shaped relationship of both electricity use and other types of energy use (combined) with household expenditure. The findings imply that as income grows households increase their energy expenditure less than proportionally, up to a threshold level of income. Beyond the threshold income, energy use increases as a proportion of income, particularly for electricity use. We identify the threshold (turning point) for both electricity and other types of energy use. Based on the current level of expenditure and its growth, reaching the turning point would require 17years for the former category but only 7years for the latter group.