The Impacts of Cash Transfers on Household Energy Choices

AAEA members release new research in AJAE

In the article “The Impacts of Cash Transfers on Household Energy Choices” published in the American Journal of Agricultural Economics, Averi Chakrabarti from the American Institutes for Research and Sudhanshu Handa from the University of North Carolina, investigate the household energy impacts of 3 government-run uncondistional cash transfer programs targeted to rual ultra-poor households.

Handa says, “We find that households increase their use of relatively improved fuels, decreasing the energy budget share dedicated to firewood and increasing the share allocated to batteries. In Zambia there is also an increase in the energy budget share spent on charcoal/coal.”

The authors continue “Reliance on inferior fuels like wood is widespread in the developing world, including in the study settings. These energy sources impose health costs and divert time from productive activities, making it important to identify ways to reduce their use. Can cash transfers help? All three cash transfers examined in the paper are found to move households away from the use of open fires as the main lighting fuel source and towards the use of torches. The impact on torch use is large: a 30% *increase* over average torch use in the control group at endline.”

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ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes three journals, the Journal of the Agricultural and Applied Economics Association (an open access journal), the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices and the online open access publication series Applied Economics Teaching Resources. To learn more, visit www.aaea.org.