Moving up the Energy Ladder: The Effect of an Increase in Economic Well-Being on the Fuel Consumption Choices of the Poor in India

摘要

Millions of poor households continue to use potentially hazardous, dirty fuel sources. As of 2010, an estimated 41 percent of households worldwide relied on solid fuel for cooking (Bonjour et al. 2013), while an estimated 500 million households use kerosene lighting (Lam et al. 2012). What will change the types of fuels poor households in developing countries consume?One common hypothesis is that economic growth shifts households toward better fuel: the so-called "Energy Ladder." In theory, however, the relationship between an increase in economic well-being and the use of dirty fuels is not obvious. Consider a simple unitary household model where households choose between purchasing dirty fuel and other consumption (including clean fuel). Assume that consumption of dirty fuel has a negative effect on health and labor supply, but that clean fuel and other consumption does not. While the wealth effect from a capital influx would induce households to buy more dirty fuel, they might simultaneously reduce their purchases depending on the degree of substitut-ability with clean fuels and other consumption. This substitution effect will not necessarily dominate the wealth effect, unless dirty fuels are an inferior good. However, a capital increase could also cause labor to become relatively more productive, discouraging the purchase of any health-damaging, dirty fuels. Thus, the overall effect on dirty fuel purchases depends on both the substitution effect and the extent to which the health effect matters. To test the implications of the model, we exploit an experiment in rural India that sought to improve the livelihoods of the poor in Murshidabad, West Bengal, India. About 800 households were targeted and about half were randomly assigned to an asset transfer program that was administered by Bandhan, a local NGO. Banerjee et al. (2011) found that the intervention led to a large and persistent increase in both assets and consumption at both 18 and 30 months. Thus, the program provides an ideal setting in which to explore how a persistent rise in a household's economic well-being affects both total fuel expenditures and fuel composition. Section Ⅰ provides a description of the experiment and data. Section Ⅱ provides the results. Section Ⅲ provides a discussion of the findings in terms of their health and environmental implications.