Households Energy Choice in Ghana

Abstract

s Energy has become important component in the world today. However, the choice of a particular energy by households has implications on among other things, environmental sustainability. This study examined households' fuel choice in Ghana since efforts made by government to reduce households' reliance on firewood and charcoal has not achieved a lot. It was found that respondents used fuels for cooking, warming the house, heating water, lighting, ironing, entertainment, cooling the house and washing amidst some associated challenges. The top three energy type were electricity, charcoal and firewood. A logit regression model revealed that the factors accounting for energy choice included income, education, family size and employment. Based on this, conclusion and policy recommendations are provided.

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© 2013 Research Academy of Social Sciences
http://www.rassweb.com 96
Journal of Empirical Economics
Vol. 1, No. 3, 2013, 96-103
Households Energy Choice in Ghana
Paul Adjei Kwakwa1, Edward Debrah Wiafe2, Hamdiyah Alhassan3
Abstracts
Energy has become important component in the world today. However, the choice of a particular energy by households
has implications on among other things, environmental sustainability. This study examined households’ fuel choice in
Ghana since efforts made by government to reduce households’ reliance on firewood and charcoal has not achieved a
lot. It was found that respondents used fuels for cooking, warming the house, heating water, lighting, ironing,
entertainment, cooling the house and washing amidst some associated challenges. The top three energy type were
electricity, charcoal and firewood. A logit regression model revealed that the factors accounting for energy choice
included income, education, family size and employment. Based on this, conclusion and policy recommendations are
provided.
Key words: Energy, Electricity, Fuel, Fuel wood, LPG, Ghana, Households
JEL: Q4, Q5
1. Introduction
The choice, use and reliance of energy source for subsistence consumption has been observed not to be uniform
across one area or within members of a community. This is because the choice of other energy types aside from fuel
wood has been found to be influenced by a number of factors. With the present accelerated rate of modernity, some
studies have predicted a shift towards more modern fuels such as paraffin, gas and electricity (Alarm et al., 1998;
Vermuelen et al., 2000; Kituyi et al., 2001). In the context of increasing oil prices and growing awareness of the need to
combat deforestation, the pattern of choice and utilization of energy leaves much to be desired.
It has been reported that fuel choices and substitution are determined by the desires for greater convenience and
cleanliness (Leach, 1987) and there is a further argument by Sarmah et al. (2002) that changes in fuel choices also
occur as there is improvement in availability of modernized fuels and increment in household incomes. This suggests
that as modern fuels become readily available, consumers acquire modern appliances such as cooking electric and gas
stoves, cooling fans, radios, television and fridges (Leach, 1987) and hence moving up the energy ladder. This implies
that the ownership of appliances and ability to use new fuel type strongly relates to income (Davis, 1998). For example
Campbell et al., (2003) concluded that wealthier households are not likely to be affected negatively by the increasingly
high cost of non-biomass fuels and they are highly susceptible to make the transition to more sophisticated alternatives.
On the other hand, the high cost of the modern fuels may likely inhibit the users among low-income households because
of their low purchasing power (Kabede et al., 2002).
Based on the energy ladder model and leap frogging hypothesis, studies have been conducted in a number of
countries to inform policy makers on issues of energy and household fuel choice. However, such studies are not readily
available in Ghana where energy issues have been integral part of daily discussions and political campaigns. The few
energy related studies in Ghana which are mainly macro based have been in the area of modeling and forecasting
electricity demand (see: Adom et al., 2012a), causality between energy and growth (see: Adom, 2011; Kwakwa, 2012;
Dramani et al. 2012, Wolde-Rufael, 2008; Akinlo, 2008) and the relationship between economic growth and carbon
dioxide emissions (see: Adom et al., 2012b).
The Ghana living Standard Survey, fifth round by the Ghana Statistical Service (GSS), (2008) has shown that over
50% of households in Ghana depend on both traditional and nontraditional energy. According to the GSS (2008)
1 Department of Business Economics, Presbyterian University College Ghana
2 Department of Environmental and Natural Resources Management, Presbyterian University College
3 Department of Agricultural and Resource, University for Development Studies, Tamale, Ghana

Journal of Empirical Economics
97
electricity and kerosene are the main sources of energy for lighting in Ghana. About 49.3% of all households in the
country still use kerosene for lighting, while 49.2% of household use grid-connected electricity for lighting. Only 1.5%
of households use candles, generators and/or other sources for light. Regarding cooking fuel, 53.5%, 30.6% and 9.5% of
households use wood, charcoal and gas respectively for cooking. The break down shows that 52.6% of urban
households use charcoal against 30.6% of rural households. Meanwhile government in Ghana over the years, have made
strives to increase the national electricity gridlines in the country as well subsidizing Liquefied Petroleum Gas (LPG)
for home use to reduce poverty and the dependence and usage of fuel wood and charcoal which will help conserve the
natural vegetation. But the evidence from the GSS (2008) tells that the effort from government help in the conservation
of the natural vegetation to has not yielded much result. Thus, even though the government of Ghana may be committed
to dealing with the energy situation in the country a solid and up-to-date information on the determinants of fuel choice
and usage is crucial. It is against this background that this present study analyses among others, the determinants of fuel
choice in Ghana.
2. Methods and Materials
Study area and Data source
The data for the study was gathered from households within the tropical forest vegetation zone and the savannah
vegetation zone of Ghana. Research assistants were sent to gather information from the households in the following
towns Koforidua, Kumasi, Tarkwa and Ho and their surrounding rural communities in the tropical forest zone, while
Tamale and Wa and their rural communities were selected from the savannah zone. Although the research used the two
zones for the study, much information was from the tropical forest zone. In the light of this condition which was beyond
the researchers’ control, it was convenient not to do any comparison analysis. A semi structured questionnaire was
developed and administered to the households’ heads to gather information necessary for the study between December
2011 and February 2012. In all a total of 507 questionnaires well and completely answered, were used in the final
analysis. The data collected concerned the characteristics of the households size, marital status of household head,
sector of employment, uses of the various energy and the associated challenges. The data was processed and analyzed
using SPSS and Stata.
Model estimation
In this study, the logit model is used to identify the determinants of fuel choice type by respondents by running
regression for each energy type namely electricity, firewood, charcoal, LPG and Kerosene. The model predicts the
probability of occurrence of a discrete variable and is utilized under the condition that the variable has two outcomes
only (Nketiah-Amponsah et al, 2012). Thus Logit regression model is used because each our dependent variable
(electricity, firewood, charcoal, LPG and Kerosene) is binary. That is each variable takes on the value of one if
household uses that energy and zero if otherwise. Below is the model:

'
)|1( xxyEpi
........................................ (1)
Where
i
p
is the probability of occurrence (for using a particular fuel), x is a vector of explanatory variables, y is
the dependent variable taking the value 0 or 1 and β is a coefficient vector of the explanatory variables. The explanatory
variables included in the questionnaire are the gender, age, family size (measured by the number of children in the
household), marital status, education, place of residence, employment in the formal sector, income, electricity usage and
LPG usage. Gender of household head is a binary variable taking the value of one (1) if the respondent is a male and
zero (0) if the respondent is female. Israel (1997) argues that comparatively women may have stronger preferences for
using a cleaner energy source than fuel wood, given their greater involvement in cooking (Abebaw, 2007). On the other
hand Njong and Johannes (2011) argues that households, headed by women are more likely to use firewood for
cooking which means the effect of gender of household head on fuel wood and other fuels cannot be determined a
priori.
Older people tend to develop habit for traditional heating and cooking more than younger households (Démurger
and Fournier, 2010) and thus we expect to have a positive relationship between age and firewood and charcoal usage
but negative for the other energies. Family size is expected to have a positive effect on all the energy choice since the
larger size is likely to increase the household energy demand. The marital status of the respondent is expected to have a
negative effect on fuel wood usage but positive for the rest since the two may pull resources together and acquire
alternative energy for home activities. It takes on a value of 1 if the respondent is married or cohabitating and 0 if
otherwise. Education is expected to positively affect demand for cleaner energy choice and negative for firewood and

P. A. Kwakwa et al
98
charcoal as seen from studies like Njong and Johannes, (2011) and Israel, (2002).This also takes on the value of one (1)
if the respondent has any formal education and 0 for otherwise. From previous studies like Onoja and Idoko, (2012)
and Abebaw, (2007) and the energy ladder model, a high level of household income is expected to reduce the demand
for traditional wood. Place of residence takes on the value of 1 if the respondent resides in a rural area and 0 for urban
area. It is expected that rural dwellers would use more of traditional fuels than modern ones due to their relatively low
standard of living.
Household heads who are employed (in the formal sector) are less likely to use traditional fuels because they are
more likely to make more money and thus would afford modern fuels. Electricity usage takes on the value of one (1)
and zero (0), if the household uses electricity and if household does not use electricity respectively. This is expected to
reduce the usage of traditional fuels because of the convenience involved. Similarly, Liquefy Petroleum Gas (LPG)
usage takes on the value of one (1) if the household uses it and zero (0) if the household does not use LPG and this is
likely to also reduce traditional fuels usage.
3. Findings and Discussion of Results
Of the 507 household heads interviewed, 42.2 percent and 57.8 percent were males and females respectively. The
mean age was 39.38 years, maximum age (98 years) and minimum age (15 years). In terms of marital status, a
significant number of the household heads were married. Generally, 63.0% were married, 30.4% were single and 3.4 %
were cohabitating. The divorced and widowed were 1.2% and 1.8% respectively. Over half of the household heads had
between 0-4 number of children (66.7%), whilst 29.9 percent had between 5-9 children, 1.9 percent had between 10-14
children and the rest of them were above 14 children. The level of educational attainment in the study area seems to be
high with 78.5% of the respondents having had some form of formal education whiles 21.5 percent had no formal
education. Again, majority (61.5%) of the households were employed in the informal sector whiles 38.5% were in the
formal sector. This is not surprising, because it seems to confirm the fact that most Ghanaian workers are in the
informal sector. While 59.4% of the household heads lived in the urban area and 40.6 percent were in the rural areas.
Considerable percentage 48.0% of the household heads were within the average income group GH¢ 100-500 annually,
with 29.45% in the income group of less than GH¢100, followed by 16.2% of income group GH¢ 501-900, 3.5% of
income group GH¢ 901-1300, 1.6% of income group GH¢ 1301-1700 and 1.2 percent income were above GH¢ 1701.
Table 1: Households response to energy choice
Energy choice
Frequency*
Percentage*
Electricity
376
74.2
Fire wood
289
57.0
Charcoal
368
72.6
Kerosene
165
32.5
LPG
183
36.1
*Multiple responses from the 507 participants were used
Table 1 shows, the precise frequencies for each energy choice of the household heads. The plurality of the
respondents (74.2%) used electricity as their source of energy, followed by charcoal (72.6%). Those that used firewood,
kerosene and LPG were 57.0%, 32.5% and 36.1% respectively.
Table 2: Households energy usage
Energy type
Usage
Electricity (%)
Fire wood (%)
Charcoal (%)
Kerosene (%)
LPG (%)
Cooking
20.9
54.5
69.2
14.6
36.5
Warming house
1.6
2.6
3.2
0.8
Cooling the house
17.9
-
-
-
-
Lighting
73.6
3.7
2.2
26.4
2.6
Ironing
62.3
-
27.4
-
-
Entertainment
58.6
1.4
-
-
-
Heating water
28.8
38.7
46.2
8.7
17.4
Washing
6.7
-
-
0.4
-

Journal of Empirical Economics
99
Table 2 shows, household response to energy usage. Five energy sources (electricity, fire wood, charcoal, kerosene
and LPG) were identified and the household heads were asked to state what they used the energy source for.(i.e.
cooking, warming house, cooling the house, lighting, ironing, entertainment, heating water and washing. Majority of the
household heads used electricity for lighting (73.6%), followed by ironing (62.3%). Over half of the household heads
used electricity for entertainment(58.6%), whilst 28.8% used it for heating water and 20.9%, 17.9%, 6.7% and 1.6%
used electricity for cooking, cooling the house, washing and warming the house respectively.
Firewood in the study areas was mostly used for cooking (54.5%), followed by heating water 38.7%. A small
percentage of the household heads used firewood for lighting (3.7%), warming house (2.6%) and entertainment (1.4%).
Similarly, 69.2% majority of the household used charcoal to cook, whilst 38.7 percent used it to heat water. About 27%
used charcoal for ironing, 3.2% and 2.2% use charcoal for warming house and lighting. This result was also confirmed
by FAO (2010) that in Ghana an estimated 2.2 million households rely on firewood as their primary source of cooking
fuel, with a further 1 million households using charcoal.
Kerosene is used for lighting by 26.4% and for cooking by14.6%. The rest of the respondents used it for heating
water (8.7%), warming house (0.8%), and washing was 0.4%. Kerosene’s usage for washing may stem from the fact
that some people use it as a detergent. Most of the household heads used LPG for cooking (36.5%) and 17.4 percent
used it to heat water. The rest used it for lighting (2.6%).
Generally, the main source of energy for cooking and heating of water was charcoal (69.2% and 46.2%
respectively).This is probably because of its relative availability and cheapness compared with other source of energy
(Okunade, 2010). Electricity was mainly used for lighting (73.6%) and this confirmed the work of Aggarwal (2011).
Table 3: Challenges associated with energy source
Challenge
Electricity
(%)
Fire wood
(%)
Charcoal
(%)
Kerosene
(%)
LPG
(%)
Scent in food
-
19.0
-
10.7
-
High bill
48.5
-
-
-
-
Frequent power outages
56.9
-
-
-
-
Dealing with Smoke
-
49.0
-
18.0
-
Low supply during wet season
-
33.9
-
-
-
Inability to use when wet
-
51.7
56.5
-
-
Shortage in supply
-
-
31.7
-
59.56
Slow in cooking
-
-
44.3
-
Fear of burning house
-
-
-
-
36.6
The results in Table 3 show the distribution of respondents and the challenges they faced in the for using the
various energy sources. Over half of the respondents 56.9% stated frequent power outages and 48.5 percent cited high
bill as the challenges associated with the use of electricity. The results also revealed that majority of the respondents
51.7% confirmed that, it is almost impossible to use firewood when wet. Other challenges faced by the respondents in
the process of using firewood had to deal with smoke 49.0%, the low supply during wet season 33% and smoke scent in
food 19.0%. The challenges associated with the usage of charcoal were inability to use when wet 56.5%, slow in
cooking 44.3% and shortage in supply 31.7%. This confirmed earlier finding by Okunade (2010). The usage of
Kerosene as an energy source also had it own challenges. About 18.0% complained of smoke and 10.7% said it usage
was associated with scent in food. With respect to the usage of LPG, a significant percentage of the respondents 59.56%
were faced with shortage in supply and about 36.6% anticipated fear of burning their house.
Table 4, offers the logit estimates for the energy sources (electricity, kerosene, charcoal, LPG and firewood) and
the factors that affect the decision of a household to use a particular energy source. The model fit the data well since the
p-values of the goodness of-fit statistics were less than 0.05 level of significance. With R2 value of 0.60, 0.33, 0.17 and
0.32 the model was able to explain 60%, 33%, 17% and 32% of the variations responsible for the households’ choice of
electricity, kerosene, charcoal, LPG and firewood respectively.

P. A. Kwakwa et al
100
Table 4: Logit estimation for the determinants of energy choice
Explanatory variable
Electricity
Kerosene
Charcoal
LPG
Fire wood
Gender(Male =1)
0.279
(0.754)
-0.372
(0.539)
-0.540
(0.461)
0.106
(0.870)
-0.645
(0.748)
Age
0.145
(0.025)
-0.215
(0.021)
0.205
(0.017)
-0.028
(0.049)
-0.026
(0.025)
Family size
0.107
(0.172)
0.263**
(0.113)
-0.247**
(0.105)
-0.406
(0.274)
0.354*
(0.250)
Marital status
(married =1)
-0.992
(0.990)
-0.632
(0.644)
-0.0368
(0.556)
0.300
(1.002)
0.395
(0.965)
Income
-0.030***
(0.011)
-0.022**
(0.009)
-0.013*
(0.007)
-0.030
(0.049)
-0.018*
(0.010)
Education(formal
education =1)
-3.210***
(0.968)
-1.672**
(0.683)
0.537
(0.554)
-
0.022
(1.051)
Formal sector
employment (yes=1)
1.453*
(0.879)
1.453*
(0.727)
-1.288**
(0.588)
-2.164**
(1.000)
0.310
(0.975)
Place of residence
(1=Rural community)
-4.714***
(1.050)
0.219
(0.659)
0.650
(0.576)
0.903
(0.993)
-0.899
(0.958)
Kerosene usage
(yes=1)
-2.815***
(0.759 )
-
0.454
(0.545)
0.385
(1.201)
Charcoal usage
(yes=1)
0.280
( 0.709)
0.505
(0.590)
-
0.890
(1.106)
0.459
(0.762)
LPG usage (yes=1)
2.302
(1.326 )
-0.049
(1.055)
-0.172
(0.836)
-
-2.901**
(0.993)
Electricity usage
(yes=1)
-
-2.902***
(0.751)
0.026
(0.664)
1.910
(1.179)
0.211
(1.014)
Fire wood usage
(yes=1)
1.405
(1.16 )
1.225
(0.962)
0.573
(0.759)
-3.287***
(1.149)
-
Log likelihood
-35.516
-55.684082
-70.118
-31.496
-31.496
Prob. > chi2 =
0.000
0.000
0.005
0.002
0.002
Pseudo R2 =
0.600
0.334
0.167
0.319
0.319
***,** and * indicates significant at 1%, 5%, and 10% levels, respectively
As shown in the table, the estimated coefficients for gender, age, marital status were all statistically insignificant
factors that influenced the likelihood of household heads using any of the five alternative energy sources. The main
factors for electricity choice at the households were income, education, residence in rural community and kerosene
usage which had negative coefficients and employment in the formal sector had positive coefficient. Concerning the use
of kerosene, the main determinants were, income, education, and electricity usage (all having negative coefficients)
whiles employment in the formal sector and family size had a positive coefficients. With regard to charcoal choice,
family size, income and employment were the main factors that negatively affected the household choices. The key
factors for LPG choice were formal sector employment and firewood usage with negative coefficients. Family size had
negative coefficient for firewood usage but income and LPG usage were positive key determinants of choice for use of
firewood. The results revealed that different factors significantly affect energy choices; hence policies targeting these
factors should be fuel specific.
Determinants of Electricity
As against our expectation, the coefficients of income and education were negative and significant, for electricity
suggesting that with increase in income and education; household heads are less likely to use it. The reason for this
outcome could be as a result of the unreliable or unpredictable nature of power supply in the country which may
compel households to find other alternative energy as income increases and they get more informed through education.
The findings contradict Heltberg (2003) who identified lower levels of education and income as the main reasons why
households do not use other electricity. The positive relationship between employment and electricity confirms our
expectation. The inverse relationship between kerosene usage and electricity tends to show that access to kerosene was
associated with lower incidence of electricity usage at the household level. Implying that, kerosene and electricity were

Journal of Empirical Economics
101
substitutes. It was also expected that household heads who resides in rural community would prefer other source of
energy rather than electricity because the use of electricity in rural areas is lower compared to that of the urban areas.
This study met our a priori expectation, the estimated coefficient for rural community and electricity was negative and
highly significant at 1% while the other alternative source of energy was statistically insignificant. This means
household heads residing in rural community are less likely to use electricity as reported by Heltberg (2003) and this
could be attributed to lack of connectivity.
Determinants of kerosene usage
Our study revealed that, income and education were highly significant at 5% level for both and had negative
influence on the kerosene usage. This implies that, increase in income and education, leads to lesser likelihood of using
kerosene. These results contradict the findings by Mekonnen and Kohlin (2009) and Heltberg (2003) that households
associated with higher education and income were more likely to use electricity and kerosene than wood and charcoal as
cooking energy. The results also show that, households with large family size have a higher tendency of using kerosene
than households with smaller family size. This was contrary to Mekonnen and Kohlin (2009). Similarly, the positive
and high significance of formal sector employment implies that, the chance of using kerosene was relatively high
among formal sector employed households heads than those who are not. This is similar to the early research by Nnaji
et al (2012). The results also revealed that the likelihood using kerosene were negatively and highly influenced by
electricity usage. This suggests that, households were more likely to shift from kerosene usage to electricity.
Determinants of charcoal usage
The influence of income on charcoal usage was as per our expectations. The model revealed that, the sign of the
coefficient for income was negative and significant at 10%, suggesting that with the increase in income, the probability
that one uses charcoal decreases among households. Charcoal is regarded as unclean fuel and households are expected
to substitute it with more clean fuel as income increases. This was contrary to Ouedraogo (2005) and Mekonnen and
Kohlin (2009) who in their study found that charcoal utilization rate increased with increasing household income but
confirmed the findings of Nyembe, (2011) that the factors driving charcoal consumption were found to be low income,
low wealth and poor household access to electricity. The model also suggests that, the tendency of using charcoal
among formal sector employed household is negative and significant at 5%. The results clearly show that households
with larger family size have lower odds of using charcoal as energy source. This implies that small family size are more
likely to use charcoal and this result agreed with Ouedraogo(2005) , that the richest households had smallest family size
and were likely to use charcoal at the expense of firewood but contradicts the findings of Pundo and Fraser (2006).
Determinants of LPG usage
LPG is acknowledged as a superior cooking fuel because it is cleaner, faster, more convenient to use compared to
firewood (Heltberg, 2003) and hence it was expected that households associated with higher income would prefer LPG.
Contrary to our a priori expectations, the formal sector employed households heads were less likely to use LPG as their
source of energy. This may be attributed to supply shortages and large distance to retailers. This study supports the
findings of Pundo and Fraser (2006) that showed a negative relationship between employment and better fuel choices.
The coefficient for firewood usage was negative and highly significant at 1%, suggesting that households which use
firewood have lower odds of using LPG as an energy source as observed by Heltberg (2003).
Determinants of Firewood usage
It is expected that larger household will prefer to use firewood because it requires a large amount of fuel in
aggregate to meet the family needs. As Pundo and Fraser (2006) have pointed out, it is comparatively affordable to use
firewood for large family than kerosene and charcoal because it’s rate of consumption per unit of time is low. Again the
cheapness of firewood would require that households with large family size use huge amount of it for their activities.
Thus, the positive estimated coefficient for family size was as expected confirming the expected profile observed by
Ouedraogo (2005). The income related explanatory variable, turned out to be significant at 10% with negative
coefficient value, suggesting that household with higher income has lower probability of using firewood. As anticipated,
this confirmed the findings of Nnaji et al (2012), that if household income increases they are more likely to use fuel
wood alternatives. This may also be attributed to high income and inconvenience considerations in using firewood as
compared to other energy source. Coefficient of the LPG usage was negative and significant at 1%. This shows that,
access to LPG reduced the likelihood of households using firewood as their main energy source. This confirmed
Manyo-Plange (2011) who revealed that household heads would rather use gas for cooking because the firewood stove
―gives off too much smoke‖ which has health implications unlike LPG.

P. A. Kwakwa et al
102
4. Conclusion and Recommendation
This study has shown that the fuels used by majority of the respondents were electricity and charcoal.
Respondents used fuels for cooking, warming the house, heating water, lighting, ironing, entertainment, cooling the
house and washing. Notwithstanding this each of the fuels had some challenges users faced. A logit regression model
show that the main factors for electricity choice at the households were income, education, residence in rural
community and kerosene usage which reduced the likelihood that a household will use electricity but employment in the
formal sector increased it. Also, the significant determinants of the use of kerosene, were income, education, and
electricity usage ,employment in the formal sector and family size. With regard to charcoal choice, family size, income
and employment were the main explanatory factors while key factors for LPG choice were formal sector employment,
and firewood. Family size and LPG explained the likelihood that a family would use firewood. All these show that
various factors account for the usage of the type of fuel choice by households and this needs to be factored into policy
making in the country. From the above we recommend that government needs to reduce households poverty so that they
can afford the cleaner types of energy. Also, education on afforestation needs to be intensified to help sustain the forest.
Acknowledgements
The authors are indebted to the Presbyterian University College, Ghana for sponsoring the study. Many thanks and
appreciation goes to Dr. Frank S. Arku of the Presbyterian University College Ghana, Akuapem Campus for his
encouragements; Daniel Agyei, Abena Denta, Michael Amoaning, Eunice Sackiley Masoperh and Eugene Agyei for
their involvement in the collection of data; and Eunice S. Masorpeh and Sara Obeng for data entry.
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