Determinants of Residential Electricity Expenditure in Pakistan: Urban-Rural Comparison

Ijaz Hussain and Muhammad Asad

Abstract

In this study the authors attempted to find out the determinants of the consumption expenditure on electricity by households. Explanatory variables are income of household, family size, number of rooms in the house, region, province and electricity consuming appliances like AC, fridge, freezer, computer, washing machine and air cooler. The authors found out that expenditure on electricity is income inelastic, increase in family size and number of rooms increases the expenditure on electricity. Households living in urban areas have more expenditure on electricity as compared to the rural households. Households in urban and rural areas of Punjab have more electricity expenditure as compared to the rest of the provinces. The acquisition of electric appliances contributed positively towards the electricity expenditure. A.C. and Freezer are the two most powerful contributors.