Abstract:
This draft paper analyses the households demand for utilities in Rwanda: Example of electricity and water. The study uses secondary data from EICV4 conducted by National Institute of Statistics of Rwanda (NISR) in 2013/2014 to investigate the expenditure elasticity for water and electricity. For comparison reason, model is specified by basing on both Working-Leser model and Engel function which are often used in some economics studies especially households’ consumption together with total expenditure. The findings reveal positive expenditure elasticities and less than one for both consumption of electricity and water. Specifically, the expenditure elasticities for electricity are 0.60 and 0.52 while expenditure elasticities for water are 0.30 and 0.27 respectively for Working-Leser model and Engel function. These elasticities therefore suggest for water and electricity to be necessary goods. Households’ characteristics tend to have very little influence on consumption of these utilities as indicated by the level of significance of parameters. But the coefficients of household size are positive and significant to the consumption of these utilities. In end of this study, recommendations for further research on these utilities are given.
