Estimating U.S. Residential Demand for Fuelwood in the Presence of Selectivity

Abstract

Residential energy consumers have options for home heating. With many applications, appliances, and fuel types, fuelwood used for heating faces stiff competition in modern society from other fuels. This study estimates demand for domestic fuelwood. It also examines whether evidence of bias exists from residential homes choosing to use fuelwood. The use of OLS as an estimator will yield biased results if such selectivity exists. Selectivity is addressed with a Heckman (1979) two-step procedure; bias in fuelwood demand estimation using OLS is reduced. Non-wood energy prices and income are major determinants of fuelwood demand. Geographical regions and urbanization confirm results from prior studies.