Application of an almost ideal demand system (AIDS) to Ethiopian rural residential energy use: Panel data evidence

► Two step LAAIDS model and MLM were applied to analysis of residential fuel use. ► I examined issues of 'energy ladder' versus 'fuel stacking' behavior of households. ► Controlling other factors increase in welfare increases demand for modern fuel. ► Traditional fuels are income inelastic but not necessarily cheaper. ► Residential fuel choice is determined by intricate web of socio-economic factors.