CHAPTER 2

REVIEW OF RELATED LITERATURE

This chapter presents some of studies or thesis that is related to the researchers
study and has relevance on the topic about electrical power consumption of different
socioeconomic class divisions. This includes studies from foreign and local societies
which are reviewed to provide ideas regarding the topic since they are interrelated.
REVIEW OF FOREIGN LITERATURE
In the study Relationship of Socioeconomic Status and Electricity Consumption,
Rebecca Herrin, conducted at Florida, states the relationship of socioeconomic class to
electrical power consumption. According to Herrin, our electric power consumption
behavior is affected by our socioeconomic status. Using different qualities of electrical
devices in order to minimize or maximize utility of power in order to save energy. The
higher class tends to purchase and use materials that has long term lifespan compared
to those in lower class that tends to use materials that is easily replaceable. Also, types
of illumination devices are discussed such as Compact Fluorescent Lamp (CFL) and
Light Emitting Diodes (LEDs). Household in higher class utilizes energy efficient devices
for illumination such as LEDs opposed to incandescent bulbs (Herrin, 2013).
In another study, according to Paul R. Ehrlich a professor Population Studies and
Professor of Biological Sciences at Stanford University in the United States, on his
report The Conference on Population and Development. Ehrlich states that:

An average rich-nation citizen uses 7.4 kilowatts of energy in

1990 The average citizen of a poor nation uses only 1kW. It was said
that there were 1.2 billion people in the rich nations, which result to an 8.9

terawatts in total consumption, whilst poor nations sum to about 4.1 TW

only. The relatively small population of rich people therefore accounts for
roughly two-thirds of global environmental destruction, as measured by
energy use. From this perspective, the most important population problem
is overpopulation in the industrialized nations. (www.dieoff.org, n.d)
In addition to the statement of Ehrlich, in the journal entitled Heres Why
Developing Countries Will Consume 65% of the Worlds Energy by 2040 by Todd
Woody, an environmental and techonology based journalist in California. Woody stated
energy consumption per person is predicted to rise as well in the developing
countries as they grow richer and their citizens covet cars, better climate control, and
power-hogging devices (www.theatlantic.com, December 3, 2013, par 5).
REVIEW OF LOCAL LITERATURE
In the Philippines, there are many studies in socioeconomic classification or
sometimes called stratification. According to Social Weather Stations (2013), the annual
average income is classified in Class A and B with Php 1,857,000.00, Class C (9%) with
Php 603,000.00, Class D (60%) with Php 191,000.00, and Class E (30%) with Php
206,000.00 annual average income.
In another study conducted by Marketing and Opinion Research Society of the
Philippines (MORES), the development of socioeconomic classification used by market
research agencies. The result was:
1SEC nine economic clusters based on expenditure pattern
of households the least spending households are grouped under
Cluster 1 while the highest is under Cluster 9 (45%) of Philippine
households belong to the three least spending [Cluster 1-3] while only
(20%) belong to top 3 [Cluster 7-9] (2012)
The ability to spend of different socioeconomic classes is a factor on their ways
of lifestyle and the amount of electrical energy consumed in their households. In the
thesis Short-run Demand for Residential Electricity in Rural Electric Cooperatives

Franchise Areas, Rolando A. Danao (2001) has explained that electricity as a common
need and a residential demand, the effects of budget and price based from purchasing
power affects power consumption. In addition, Danao had also elaborated that
electricity consumption is affected greatly by the size of the household. An average of
13.8% on electricity consumption is said to rise per additional member.
Electricity as a common source of energy had been used by the majority.
According to Danao, since 1989, electricity is commonly used in households by only
65% of the population and by 1994, it is said to be 84% of the households, the growth of
residential electricity consumption grew at an average of 9.4%. In support to what
Danao stated, the Household Energy Consumption Survey (HECS) conducted last
2011, despite numerous sources of energy, electricity remains [since 2004 survey]
as the most common source of energy used by households in the Philippines.
(Philippine Statistics Authority, 2013). One cannot say that an individual residential
households does not utilize electricity for it is the most common source of energy.
As a common source of energy, the Magna carta for residential electricity
consumers, Energy Regulatory Commission (ERC) stresses the basic rights of
residential electric users towards quality electric power and their obligations towards the
electric companies (2004). In accordance to the right of each residential consumers to
have electricity, the government regulates and provides guidelines in order to ensure
quality, safe, and sustainable source of energy. In Republic Act No. 9136, electric power
industry reform is promulgated to ensure quality, affordable, and reliable electrification of
the country, with transparent and reasonable prices to achieve greater economic
efficiency (p.1, 2001).
The different residential demand of different socioeconomic class divisions also
lead to the way electricity is being utilized. The power consumption of different class

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varies on their ability to pay. Electricity is being utilized most in illumination, according to
HECS:
In 2011, electricity is mostly used for lighting purposes with 74
percent of households reporting the use of electricity for such purposeIn
the 2004 round of the survey, electricity was used by about 78 percent of
households (Philippine Statistics Authority, 2013)
Different socioeconomic classes can afford different illumination devices, this
illumination varies from Light Emitting Diodes (LEDs) up to Compact Fluorescent Lamp
(CFL). Due to the availability and affordability of CFL, it is widely used despite its high
power consumption compared to LEDs. According to HECS:
Regarding the types of lamps used in 2011, Compact Fluorescent
Lamp (CFL) was the most popular with 77 percent of households using
electricity for lighting. This type of lamp was most commonregardless
the income of the family. (Philippine Statistics Authority, 2013)
The utilization of electricity is not only limited to illumination but it includes a
broad range of usage. It is true that some can afford luxury devices and others can
afford more luxurious devices than the other. Danao elaborated that electricity is a
product for services such as lighting, entertainment, cooling, and other electrical
devices. Household electricity consumption would then be influenced by the variation of
household appliances present and their utilization (2001). In addition, HECS stated that
other utilization of electricity aside from lighting were for ironic clothes, laundry,
cooking and food preparation, computer activity, water heating and bathing, and
water pumping. (Philippine Statistics Authority, 2013). As a commodity for luxury
HECS added:
Electricity is also popularly used for recreation and space cooling
for recreation, used electricity for TV viewing, for their radio/tape
recorder/stereo, for their VCR/karaoke/videoke. At least one in three
households with an average monthly income of Php 10,000.00 or more
for their VCR/karaoke/videoke. (Philippine Statistics Authority, 2013)

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Despite all factors leading to the increase of electrical power consumption,

Danao stated that ages of end users affects power consumption and an increase in year
age results to a 0.4% increase in electricity consumption, despite the results, Danao still
put age as a variable not significant enough to power consumption contribution (2011).
Also, education of electrical devices and utilization of efficient low power devices lowers
electrical power consumption.
Analysis
The reviews of foreign and local literature presented above included profile of
respondents, their socioeconomic classification, electricity as a common source of
energy, and the utilization of electricity according to classes. In this paper, the
researchers includes profiles of respondents in the survey, their electric power
consumption, and different electrical devices used. Related studies such as the effect of
age in electrical power consumption is not included, only the electrical devices being
used. The research is to prove difference in power consumption in different chosen
socioeconomic classes located here in Cagayan de Oro.

THEORITICAL FRAMEWORK
The researchers use the survey-questionnaire method for profiling, gathering
information and listed electrical devices of each individual households for comparison.
In the survey-questionnaire, technical data may be different for there may be different
interpretations of the questions. The reasearchers use the 1SEC classification where it
has nine divisions. In this method, the profiling of the respondents is to determine the
socioeconomic classification where they belongs.

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This research is a result in the observation of the researcher towards average

power consumption of each residential households for improvement of the designs to be
done within the city.