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Energy Expenditure in Egypt: Empirical Evidence Based on a Quantile Regression Approach

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Abstract

This paper investigates the key factors affecting household energy expenditure in Egypt. Based upon the latest 2015 Egyptian HIECS Survey, we develop a quantile regression model with an innovative variable selection approach via the adaptive lasso regularization technique to untangle the spectrum of household energy expenditure. Unsurprisingly, income, age, household size, housing size, and employment status are salient predictors for energy expenditure. Housing characteristics have a moderate impact, while socio-economic attributes have a much larger one. The most significant variations in household energy expenditures in Egypt are mainly due to variations in income, household size, and housing type. Our findings document substantial differences in household energy expenditure, originating from the asymmetric tails of the energy expenditure distribution. This outcome highlights the added value of implementing quantile regression methods. Our empirical results have various interesting policy implications regarding residential energy efficiency and carbon emissions reduction in Egypt. It proposes that targeting policies to specific households can improve the effectiveness of energy efficiency policies. These policies could combine both supply-side interventions, such as reducing energy services’ cost and demand-side policies for energy-intensive consumers.

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Data Availability

Information on data source is provided as a supplementary material.

Notes

  1. International Panel for Climate Change: https://www.ipcc.ch/pdf/presentations/poznan-COP-14/diane-urge-vorsatz.pdf

  2. International Panel for Climate Change: https://www.ipcc.ch/pdf/presentations/poznan-COP-14/diane-urge-vorsatz.pdf

  3. See Energy Efficiency Directive and Energy Performance Building Directive revised in 2018: https://euroace.org/euroace-positions/energy-performance-buildings-directive-epbd/

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Acknowledgements

We are grateful to two anonymous referees and to the editor for the very useful suggestions on a previous version of the paper.

Funding

This work was sponsored by the Economic Research Forum (ERF) and has benefited from both financial and intellectual support.

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Authors and Affiliations

  1. Faculty of Management, Economics & Sciences, UMR 9221-LEM-Lille Économie Management, Lille Catholic University, F-59000, Lille, France

    Fateh Belaid

  2. LEO, University of Orléans, F45067, Orleans, France

    Christophe Rault

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  1. Fateh Belaid
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The name of the authors listed in the metadata (1st page of the built PDF) and manuscript text is in the same order and is completely provided.

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Correspondence to Fateh Belaid.

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Appendices

Appendix 1

Fig. 4
figure 4

Adaptive lasso shrinkage pattern

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Appendix 2

Fig. 5
figure 5

Quantiles regression graphs

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Appendix 3

Fig. 6
figure 6figure 6

Bayesian regression diagnostics

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Appendix 4

Table 5 Variable definition and sources
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Belaid, F., Rault, C. Energy Expenditure in Egypt: Empirical Evidence Based on a Quantile Regression Approach. Environ Model Assess 26, 511–528 (2021). https://doi.org/10.1007/s10666-021-09764-8

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