Energy Goods Demand in Tabalong Regency

Almost-Ideal Demand System Approach

  • Ahmadi Murjani BPS-Statistics of Tabalong Regency


The declining trend of Tabalong Regency’s economic growth in recent years adversely affected the poverty rate. Further, the recent energy subsidy policy applied by the Indonesian Government has pushed the subsidy’s budget down for some energy goods. Therefore, there should be an awareness regarding the current energy policy and the impact on the poverty particularly in Tabalong Regency. This paper investigates the demand system for the three main energy goods; premium fuel, electricity, and Liquid Petroleum Gas (LPG) in Tabalong Regency of the South Kalimantan Province. Although the same method was previously used on the different topics, this paper uniquely utilizes the combined Linear Approximation and Quadratic Almost-Ideal Demand System on the particular energy policy topic. This paper utilizes the National Social Economics Survey conducted by BPS-Statistics of Tabalong Regency in 2016. The results show that the income elasticity of demand for the top 60% and the bottom 40% of the income groups were positive; however, slight differences could be seen. For the top 60% of the income group, the income elasticities of demand were 0.97, 1.02, and 1.08 for premium fuel, electricity, and LPG respectively. On the other hand, the bottom 40% of the income group had 0.99, 1.07, and 0.91 of income elasticity of demand for premium, electricity, and LPG. The price elasticity of demand for both income groups had negative signs, which is agreeing with the theoretical demand function. These results indicate that the current energy policy should continue with securing the poor households from the possible effect.

Author Biography

Ahmadi Murjani, BPS-Statistics of Tabalong Regency

Statistician at BPS-Statistics Indonesia. Currently assigned as a section head in the regional office. Graduated from Institute of Statistics Jakarta (undergraduate degree) and National Graduate Institute for Policy Studies (GRIPS) Tokyo (postgraduate degree). Research interest covers poverty dynamics, subsidy policy, and macro/microeconomics issues.


Banks, J., Blundell, R., & Lewbel, A. (1997). Quadratic Engel Curves and Consumer Demand. Review of Economics and Statistics, 79(4), 527–539.

Bazzazan, F., Ghashami, F., & Mousavi, M. H. (2017). Effects of Targeting Energy Subsidies on Domestic Electricity Demand in Iran. International Journal of Energy Economics and Policy, 7(2), 9–17. Retrieved from

Bhakti, D. (2011). Permintaan Energi Rumah Tangga di Pulau Jawa. Bogor Agricultural University. Retrieved from

Breisinger, C., Engelke, W., & Ecker, O. (2012). Leveraging Fuel Subsidy Reform for Transition in Yemen. Sustainability, 4(11), 2862–2887.

Christensen, L. R., Jorgenson, D. W., & Lau, L. J. (1975). Transcendental Logarithmic Utility Functions. The American Economic Review, 65(3), 367–383. Retrieved from

Dartanto, T. (2013). Reducing Fuel Subsidies and the Implication on Fiscal Balance and Poverty in Indonesia: A Simulation Analysis. Energy Policy, 58, 117–134.

Deaton, A., & Muellbauer, J. (1980). An Almost Ideal Demand System. The American Economic Review, 70(3), 312–326. Retrieved from

Direktorat Penyusunan APBN, & Direktorat Jenderal Anggaran. (2017). Informasi APBN 2017. Jakarta: Ministry of Finance of the Republic of Indonesia.

Gundimeda, H., & Köhlin, G. (2008). Fuel Demand Elasticities for Energy and Environmental Policies: Indian Sample Survey Evidence. Energy Economics, 30(2), 517–546.

International Institute for Sustainable Development. (2012). Panduan Masyarakat tentang Subsidi Energi di Indonesia: Perkembangan Terakhir 2012. International Institute for Sustainable Development.

Jin, Y., & Zhang, S. (2013). Elasticity Estimates of Urban Resident Demand for Electricity: A Case Study in Beijing. Energy & Environment, 24(7–8), 1229–1248.

Klein, L. R., & Rubin, H. (1948). A Constant-Utility Index of the Cost of Living. The Review of Economic Studies, 15(2), 84–87. Retrieved from

Mariyono, J. (2017). Determinants of Demand for Foreign Tourism in Indonesia. Jurnal Ekonomi Pembangunan, 18(1), 82–92.

Nicholson, W., & Snyder, C. (2011). Microeconomic Theory: Basic Principles and Extensions. Ohio: Nelson Education.

Poi, B. P. (2012). Easy Demand-System Estimation with Quaids. Stata Journal, 12(3), 433–446. Retrieved from

Rohac, D. (2013). Solving Egypt’s Subsidy Problem. Policy Analysis. Cato Institute. Retrieved from

Statistics Indonesia. (2016). Indonesia - Survei Sosial Ekonomi Nasional 2016. Statistics Indonesia.

Statistics of Tabalong Regency. (2017). Tabalong Regency in Figures 2017. BPS-Statistics of Tabalong Regency.

Stone, R. (1954). Linear Expenditure Systems and Demand Analysis: An Application to the Pattern of British Demand. The Economic Journal, 64(255), 511–527.

Sulistio, J., Wirabhuana, A., & Wiratama, M. G. (2017). Indonesia’s Electricity Demand Dynamic Modelling. In IOP Conference Series: Materials Science and Engineering (Vol. 215). IOP Publishing.

Theil, H. (1975). Theory and Measurement of Consumer Demand. Amsterdam: North-Holland Pub. Co.

Widarjono, A. (2013). Food Demand in Yogyakarta: Susenas 2011. KINERJA, 17(2), 104–118.

Widarjono, A. (2016). Modeling Sistem Permintaan untuk Penelitian Ekonomi dengan SAS. Yogyakarta: UPP STIM YKPN.

Yii, K.-J., Geetha, C., & Chandran, V. V. (2017). Estimating the Elasticity of Energy Over Consumption at Micro Level: A Case Study in Sabah, Malaysia. Energy Procedia, 105, 3571–3576.
How to Cite
MURJANI, Ahmadi. Energy Goods Demand in Tabalong Regency. Jurnal Bina Praja: Journal of Home Affairs Governance, [S.l.], v. 9, n. 2, p. 307-319, nov. 2017. ISSN 2503-3360. Available at: <>. Date accessed: 21 jan. 2018. doi: