Urban fuel demand in Ethiopia: an almost‐ideal demand system approach♣

Abstract

This paper investigates the opportunities for reducing the pressure of urban centers on rural forest areas, using a dataset of 350 urban households in Tigrai in northern Ethiopia. We applied an almost‐ideal demand system to fuels. The results suggest that reducing the pressure of urban centers on local forests cannot be seen in isolation from broader development policies aimed at raising the level of education and income of the population. Higher income also stimulates the demand for fuel.

Keywords: Price elasticities, income elasticities, almost‐ideal fuel demand system, reducing deforestation, Ethiopia