Energy consumption and household’s wealthy: case of herder household in Mongolia

More than half the world's population lives in rural areas, nearly 90 percent of them - some 2.8 billion - in the developing countries. Most of today's 2 billion people without adequate energy services are in rural areas. Currently, share of herder households in Mongolia with electricity sources accounts 82.7 per cent of total 160.2 thousand herder households (NSO, 2011). This study estimates the herder household’s energy consumption based on theory of energy ladder hypothesis, Engle curves and Almost Ideal Demand System (AIDS) model as demand system analysis. The results of the study illustrate that the Energy Ladder hypothesis fits to herder households in Mongolia. They mostly use dung, wood, forest and grass waste and coal in regard to their income and energy source availability. The share of energy expenditure estimation shows that energy is necessity goods for herders. Total household expenditure inversely related to the energy expenditure share. The study results conclude that the herder’s energy consumption is on a very low level and some policy interventions are necessary for improving herder´s livelihood. DOI: http://dx.doi.org/10.5564/mjas.v11i2.229 Mongolian Journal of Agricultural Sciences Vol.11(2) 2013 pp.103-109