Energy Efficiency

, Volume 7, Issue 5, pp 903–921 | Cite as

Modelling useful energy demand system as derived from basic needs in the household sector

  • Zahra A. Barkhordar
  • Yadollah SaboohiEmail author
Original Article


Inter-fuel substitution in the household sector depends on whether their target energy use is similar or not. To account for the effect of end-use application on energy demand, the concept of useful energy is utilized in which energy carriers are grouped according to their end-use applications. Useful energy is assumed as a commodity demanded to satisfy needs. Therefore, it should possess certain characteristics in accordance with the nature of basic needs. These characteristics were investigated through a two-level budgeting system with demographic variables indicating rural and urban households of Iran. The model has been applied to estimate the behavioural parameters such as income and price elasticities of useful energy demand. The estimated values of income and own-price elasticity show that all categories of useful energy are necessities with a relatively inelastic demand. Among them, cooling and non-substitutable electricity has the highest income and own-price elasticity, while lighting and water heating are ranked as the most necessary types of useful energy due to their low-income elasticity. In addition, small values of cross price elasticities support the idea that different types of useful energy are almost independent. Therefore, the results confirm that useful energy demands could be considered as basic needs.


Basic needs Useful energy Demand model Residential End-use energy 




Expenditure elasticity


Likelihood function


Commodity price


Price of final energy




Final energy


Quantity variable of either household size or household’s living area







Availability of appliance


Average rate of energy consumption


Average utilization time


Marginal budget share in LES


Subsistence bundle of commodities


Useful energy availability


Energy efficiency of appliance



Counter on useful energy


Counter on final energy


Counter on appliance type


Household expenditure decile


Counter on household characteristic (household size or living area)



Useful energy


Final energy



Almost ideal demand system


Constant Elasticity of Substitution


Linear Expenditure System


Model for Analysis of Energy Demand


Quadratic AIDS


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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  1. 1.Mechanical Engineering DepartmentSharif University of TechnologyTehranIran
  2. 2.Sharif Energy Research Institute (SERI)Sharif University of TechnologyTehranIran

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