Determinants of Kerosene and LPG Demand in Ethiopa

In this book attempts are made to identify determinants of Kerosene and LPG demand in Ethiopia. The study estimates Kerosene and LPG demand using time series data starting 1964/65 to 2004/05. To determine whether there exists long run relation between Kerosene and LPG demand and its determinants, the Johansen procedure of co-integration analysis is used. Accordingly, its result shows that the real price of Kerosene, real price of LPG, real per capita income and real foreign exchange earnings are found to be statistically significant while population growth and level of urbanization are statistically insignificant. Similarly in the case of LPG demand; real price of LPG (own price), real price of Kerosene (relative price), population growth, level of urbanization and real foreign exchange earnings are found to be statistically significant while only real per capita income is statistically insignificant. In the short-run, price of Kerosene, real per capita income and population growth are statistically significant in Kerosene demand and real price of LPG, real per capita income, population growth are statically significant in LPG demand.