An Examination of the Household Electricity Expenditure in Turkey with Two-Part Model

Abstract

The share of the residential sector in electricity consumption which has an increasing trend in Turkey is crucial. The electricity demand of residental sector may vary depending on many factors such as increase in population and housing, climatic conditions, and consumption behaviors of household. The purpose of this study that examines the effects of household characteristics, construction of housing in which the households live, possession of electronic goods and spendings of household to different energy sources on household electricity expenditure in Turkey. Since electricity expenditure was not observed in some households included in the data set, the Two Part Model (2PM) is used to investigate the determinants of household electricity expenditure. According to the results of the study, household income, household size and the size of the dwelling have a positive effect on the electricity expenditure of the household. In addition, the number of air conditioners in the household, ownership of refrigerators, dishwashers, and consumption of natural gas and liquefied hydrocarbons are factors that increase electricity expenditure. According to the results of the Probit and linear regression model, the factors affecting the electricity consumption possibilities and the electricity expenditure of individuals may differ. Therefore, the findings of marginal effects of Two Part Model which are derived from the results of the two models are advantageous as they show the effect of explanatory variables on the expected electricity expenditure of households.