An Empirical Estimation of Energy Poverty in Poor South African Households

Abstract

This paper provides empirical evidence on the determinants of Energy Poverty on rural and urban informal households in South Africa using the National Income Dynamics Survey (NIDS, 2012). The paper provides evidence on the impact of Energy Poverty on these households while controlling for individual, household and demographic characteristics. This is formulated within the logistic regression framework, while defining Energy Poverty using the Economic/expenditure approach consistent with the definition by the Department of Energy (DoE) of South Africa. The logistic model of energy poverty reveals that household expenditure on transport, food, schooling, income level, age and education level of the head of the household, household size and home size are important factors in explaining the state of energy in rural and urban informal households in South Africa. This paper also discusses limitations regarding the dependent variable (Energy Poverty) as defined in the paper and by the DoE. Lastly, some recommendations are made for Regulators and Policy Makers.