Understanding the Complementarity and Substitutability of Cooking fuels in Developing Countries: Evidence from 2020/21 Tanzania National Panel Survey

Abstract

Increasing access to alternative energy sources in developing countries might be a potential for multiple energy consumption rather than switching from traditional to modern ones. This study aims to examine the complementarity and substitutability of cooking fuels and factors influencing households’ choices of such fuels in developing countries. Two categories of cooking energy were considered: traditional (dirty) fuels - firewood, charcoal and kerosene; and modern (cleaner) fuels - Liquefied Petroleum Gas (LPG) and electricity. Based on a nationally representative sample of 5,199 households from the Tanzania National Panel Survey (NPS) of 2020/21, results from a Multivariate Probit model indicate that there is strong substitutability between traditional and modern fuels. Moreover, substitutability exists between solid fuels i.e., firewood and charcoal, while cleaner sources complement each other. Households’ cooking energy decisions were observed to be influenced by demographic and socioeconomic factors such as age, education, dependency ratio, wealth status, house ownership and dwelling location. In light of these findings, the study recommends appropriate policy packages for fastening energy transition in developing countries.