Electricity Market Structure and Residential Demand in Pointe-Noire, Congo

Electricity is considered a vital element of the national economy in the majority of countries. The objective of this article is to analyze the effects of the electricity market structure on residential demand in Pointe- Noire, Congo. To analyze these effects, we estimated a Stone expenditure model based on data from the Household Electricity Consumption Survey in the city of Pointe-Noire, Congo. Thus, the results obtained allowed us to assess the market structures and household electricity demand. Except for the price of gas, household size of 1, and appliance equipment, all variables are significant and have effects on electricity expenditures. These variables provide the presence of wealth effects, electricity price effects, income effects, and effects of the level of household appliances. Also, the estimation of price elasticities on the standard of living clearly indicates that the impact of an increase in electricity prices does not affect the demand of wealthy, modest, and middle-income households to the same extent. We have two major results: the presence of wealth effects, household size effects, effects of the level of household appliances, and electricity price effects. The impact of an increase in electricity prices on the demand of modest and poor households in an estimation of price elasticities on the standard of living alters electricity consumption. Our results show that households' sensitivity to electricity prices is not nonexistent and is not the same for all households (modest and poor).