Microeconomic Determinants of the Energy Poverty in the Kyrgyzstan (2010-2012)

Abstract

Kyrgyzstan is categorized by being energy poor on the household level, especially in rural areas. Approximately 60% of the rural population uses traditional means of energy, use of traditional energy type suggests about energy poverty. Moreover, every third household is energy poor according to the sample of KIHS data. Considering that energy is necessary for daily life, reduction of energy poverty is important issue for states, international organizations, research centers, and by households itself. The reason for that expenditure on energy decreases other necessary expenditure, because necessity expenditure must be done in any way. For that reason, objective of the study is to investigate microeconomic determinants of energy poverty of the household in Kyrgyzstan. Hypothesis based on literature about energy poverty worldwide, which is economic determinants have higher and positive effect on energy poverty than social determinants in Kyrgyzstan. Micro level data (KIHS) from National Statistics of the Kyrgyz Republic will be used. For the panel data, binary probit method is the estimation method. Research found out that economic determinants exert insignificant positive effect on the energy poverty which suggest that income increase cannot deal with the problem of energy poverty. Hypothesis is rejected. The only and successful way to reduce energy poverty is infrastructural development such as “central heating system” which will provide household with accessible energy at affordable price.