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Restoring Balance: Bangladesh’s Rural Energy Realities
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Table 4.4. Households by Lighting System and Income Type of Home Lighting System (% households)
Income Quintile (thousands of Tk/year) < 25 25–50 50–75 75–100 >100 Average
Kupi Only 41.4 19.5 13.3 10.6 5.0 20.1
Hurricane-based 43.6 57.3 53.0 51.2 40.6 50.8
Electricity-based 15.1 23.2 33.7 38.2 54.4 29.0
Source: BIDS Survey (2004).
for lighting. Although this is a rather rudimentary measure, it is interesting to compare kerosene expenditures for households with and without electricity. Because households without electricity spend more on kerosene, some fuel substitution occurs (see Table 4.5). Generally, households with electricity spend 200 to 500 takas less per year on kerosene. Although this avoided expenditure is an interesting benefit, it severely underestimates the true benefits because households with electricity have significantly more light compared to those with kerosene lamps. A better way to measure the welfare gains of switching from kerosene to electricity involves a concept called consumer’s surplus, which is based on a demand survey for lighting (see Annex 3). The gain in welfare, as measured by consumer’s surplus, is substantial for the average consumer switching from any of the kerosene lamps to electric lights (see Table 4.6). The estimated benefit is 40 to 45 percent of household income (a substantial gain in terms of Bangladeshi takas). The reason is the inherent efficiency of electric lamps. The price of each kilolumen-hour from incandescent bulbs or fluorescent tubes is only about 1.43 percent of the cost of comparable lighting service from kerosene lamps (see Table 3.5).
Table 4.5. Household Expenditure by Electrification Status on Kerosene and Other Energy Sources, by Income Group (Tk per year) Households without Electricity Income Category (thousands of Tk) <25 25–50 50–75 75–100 >100 All
Kerosene Expenditure 467.8 645.9 794.4 883.6 1,133.8 688.9
Source: BIDS Survey (2004).
Other Energy Expenditure 2,466.0 3,613.8 4,715.2 5,886.1 5,944.9 3,905.0
Households with Electricity Kerosene Expenditure 281.9 319.2 415.6 418.8 559.9 408.8
Other Energy Expenditure 3,054.7 3,865.4 4,179.2 4,095.9 5,270.3 4,227.2