METHODOLOGICAL DESCRIPTION (a) Underlying Definitions and Concepts: This indicator corresponds to the overall
household expenditures on commercial energy divided by total disposable income or
private consumption. Expenditure on energy can be obtained from surveys of
household expenditure or from the sum of all the consumed energy commodities
multiplied by their corresponding unit price. Per capita consumption by the overall population and by the 20% of the population
with the lowest income may be assessed through the distribution of income. Each
distribution is based on percentiles of population — rather than of households — with
households ranked by income or expenditure per person.
(b) Measuring Methods: There are a number of choices about data that can influence
the precise value of disposable income (private consumption) per capita. It is
important how ‘income’ is measured — for example, whether it is total household
income or per capita household income, or income per equivalent adult. In addition, it
matters whether or not the incomes are weighted by household size, since households
with lower incomes per person tend to be larger.
The World Bank, for example, prefers to weight by household size and calculate the
shares held by persons rather than households for most purposes. As a general rule,
the World Bank also considers household consumption expenditure to be a more
reliable indicator of welfare than income. Incomes can vary excessively over time and
are also more difficult to measure accurately, particularly in developing countries.
If data on energy expenditures are not available, the amount of energy consumed and
corresponding fuel prices must be used. Because prices change through the year, the
data collected must refer to a fixed date.
(c) Limitations of the Indicators: Availability of data on a number of developing
countries may be a limitation.
