lighting, cooking and learning to higher-level necessities such as cleaning, sanitation, health care, and

refrigeration.

A United Nations human development report entitled 'Energy and Human Well-Being' (2001)
acknowledged that energy has a significant influence on the Human Development Index (HDI). The
relationship is vastly evident in countries that are in the early stages of development.

Lin et al. (2014) studied the structure of residential energy consumption in China at the
provincial level. The study aimed to identify determinants that affect residential energy consumption
using regression analysis. The study revealed that an increased rate in income and urbanization process
could create growth in residential energy consumption. However, there appears to be an opposing
finding on a study conducted by Ding et al. (2016) in China. The study identified factors that affect the
spatial heterogeneity of household energy consumption in China by utilizing Stochastic Impacts by
Regression on Population, Affluence and Technology (STIRPAT) model and panel data model. The result
of the study revealed that there is a negative relationship between urbanization level and household
energy use per capita. It was also reported that urbanization urges inefficient, traditional electricity
users to switch to more efficient and energy saving devices. This claim is further supported by a study
directed by Niu et al. (2016) where their findings stated that with increasing income, households
favoured branded electrical appliances that are high in quality and had energy efficiency features since
well-known products run more stable.

The Energy and Poverty report by IEA-World Energy Outlook (2002) reported that electricity
consumption is strongly related to health. It was observed that energy consumption is four times higher
in countries that have less than 5% poor population, compared with countries which have 75% of the
population living under the poverty line.

Kozlova (2012) studied the response of residential electricity to price changes in Ukraine. The
study aimed to estimate how an increase in electricity price affects the electricity consumption of urban
and rural population using regression analysis. The study found that electricity price has a significant
effect on consumption, and is very evident in the rural population than in their urban counterparts.

Chen (2017) developed an empirical model to determine the factors affecting electricity
consumption in the residential sector in Taiwan by utilizing regression model. The study revealed that
energy labelling schemes have significant contribution in reducing the electricity consumption of the
residential sector; Electricity cost, however, does not contribute significantly to the model.

Electricity Consumption and Spatial Factors

The study conducted by Balta-Ozkan et al. (2016) in the United Kingdom was guided with a
primary objective of analyzing every household's perceptions and attitudes towards energy. Using
econometric models such as Probit models and ordered Probit models, it was learned that large city
residents were less likely to acknowledge energy as a national concern compared to their rural
counterparts. Their failure to acknowledge such concern might be the cause of policy issues in urban
areas.

The notion of geological disparity in energy consumption is also a prominent feature in the study
of Pachauri (2003) where it analyzed both direct and indirect pattern variations of household energy
requirements in India using econometric analysis. The study discovered that urban household energy
requirements per capita are higher by 25% than those of rural residents. The manuscript also regarded
rural households as 'energy intensive' than its urban households counterparts. Likewise, a similar study
conducted by Ding et al. (2016) showed urbanization decreases energy use in the Western developing
regions of China, whereas the urbanization effect varies across Eastern region belonging to the middle-
income level.

Tian et al. (2014) conducted a study on domestic energy consumption in urban areas in London.
The study utilized several models such as OLS regression, spatial error model (SEM), and spatial lag
model (SLM). For both SEM and SLM model. The utilized model row standardized and distance as spatial
weight matrices. The study revealed that there is the presence of spatial autocorrelation for both
electricity and gas per dwelling in London. Lagrange multiplier was also utilized to validate the
appropriate model for the study. It was discovered that spatial error models are more applicable than
spatial lag models in analyzing the association between the number of houses allocated to the
evaluation of tax bands and the use of energy in London.

The idea of incorporating spatial approach in electricity consumption in Brazil was also a leading
feature in the study of De Assis Cabral et al. (2017). The main objective of the paper was to propose an
alternative technique for Moran's I test in identifying spatial dependencies in exploratory analyses. They
conducted a study presenting an extension of univariate and bivariate Moran's I to panel data using
Spatial ARIMA model (ARIMASp). The study revealed that ARIMASp shows better predictive
performance as compared to the conventional ARIMA model. The result of the study gave a validation
that spatiotemporal models can give a better perspective in analyzing electricity consumption in Brazil.

Francisco et al. (2007) developed an empirical model to investigate a relationship between

electricity consumption, economic classification and household income in Sao Paulo, Brazil, using
regression OLS model and spatial autoregressive model. The results revealed that the variable,
household income exhibits strong spatial autocorrelation (Moran score =0.78). The study also revealed
that electricity consumption (kWh) shows a strong positive relationship with household income.

Blazquez Gomez et al. (2013) created an empirical model to determine the influence of price,
income, and spatial spillovers on residential electricity demand in Spain. The research object was the
Spanish provinces. Using the spatial autoregressive model with autoregressive disturbances (SARAR),
the findings of the study revealed that there was a presence of spatial dependency on household
electricity consumption in the provinces of Spain. It was also seen that the effect of the change on
household disposable income on residential electricity demand varied across the Spanish territory.
Moreover, as seen in all provinces, there was a positive relationship between disposable income and
residential electricity consumption.

Ojede et al. (2018) developed a spatial econometric model to study the short and long-run
effects of productive higher education, and highway infrastructure spending financed by different
revenue sources on state economic growth in the U.S.A. The spatial models such as spatial lag, spatial
error and spatial Durbin model for the research study. The study found a positive and significant effect
of highway expenditure to economic growth since highway networks provide economic and social
benefits that may result in positive spillover to neighbouring states. The study concludes that accounting
for spillover effects provides a more inclusive approach in analyzing the effect of productive government
spending.
 The idea of incorporating spatial approach in solid fuel consumption was also a prominent
feature in the study of Mason (2012). The study applied spatial data analysis and multi-level analysis to
investigate if there is a spatial difference in solid fuel use for cooking in the Philippines and identify
social characteristics associated with fuel. The study revealed that both spatial effect and social
characteristics affect solid fuel consumption.

2.2.2 Local Studies

(Lavado, Barrios, & Abrigo, 2010) developed a stochastic frontier model augmented with spatial-
temporal tennis which aimed to help electric cooperatives (EC) mitigate underestimation of electricity
supply and demand in rural areas in the Philippines. The research Object was electric cooperatives. The
data were obtained from 119 electric cooperatives from 1990-2002. It was learned that labour has a
significant influence on the electricity production function. Furthermore, EC electricity demand was
found to exhibit spatial dependence.

Other Local studies using Spatial Econometric Models

Pede et al. (2012) conducted a study on regional income and economic growth in the Philippine
provinces. The study utilized OLS regression, Spatial Lag and Error Model. For the estimation of the
spatial regression model, the study used distance-based weight matrix: arc distances with threshold
T=126 miles. The findings of the study revealed that Spatial Error Model is a more appropriate model for
the study of income-economic growth in the Philippine provinces. It was also revealed that poverty
incidence has a negative and significant effect on per capita growth.

The idea of incorporating spatial perspective in income growth in the Philippines was also a
leading feature in the study of Mapa et al. (2013). The research object was the 74 provinces in the
Philippines. The study utilized a distance-based weight matrix: 655 kilometres to ensure the existence of
at least one neighbour for every province. Furthermore, aside from the weight matrix, the study added
neighbourhood effect variable in the regression models using contiguity measure (nearest
neighbourhood distance). The findings of the study revealed that Spatial Lag Model was a more
appropriate spatial model for their study. It was also discovered that neighbourhood effect variable
contributes positively and significantly in the model along with (-) initial income, (-) percentage of young
dependents, (-) percentage of mayor and government with the president's party, and (+) year indicator
(for 1994-2000). To summarize, Table 5 presents a condensed result of literature.