Long term modelling of household demand and its implications for energy planning

Bruno Merven, Faaiqa Hartley and Jules Schers
March 2020

Abstract:

This paper proposes an alternative method for modelling long term changes in household consumption in computable general equilibrium models. The analysis is applied to the case of South Africa and focuses on the change in income related lifestyle choices on energy demand and composition. A comparison of adjusting household consumption share (relative to static shares) reveals a shift in the economic structure to services production with a marginal increase in employment. Energy demand is found to decrease due to lower household as well as production demand with the economy becoming less energy intensive.

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