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Examining the willingness-to-pay for exclusive use of LPG for cooking among rural households in India

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  • Chindarkar, Namrata
  • Jain, Abhishek
  • Mani, Sunil

Abstract

Using unique household-level data from rural areas of six energy-access-deprived states in India, we examine the willingness-to-pay (WTP) for exclusive use of liquefied petroleum gas (LPG) for cooking. We find that awareness about LPG's health benefits and diffusion of LPG within the community are the strongest determinants of WTP for exclusive use of LPG. Among demographic characteristics, only household size is correlated with WTP. Importantly, households exhibit significant price elasticity with regards to exclusive use of LPG. Households with irregular cash flows are less likely to pay for exclusive use of LPG. We find limited evidence supporting a negative association between availability of free biomass and the WTP for exclusive use of LPG. In contrast, higher household expenditure on purchased biomass is positively associated with WTP. Our estimates of mean WTP suggest that they are higher than the current effective monthly cost of subsidized LPG across households. However, they mask variation, and disaggregated estimates suggest that about 40–45 per cent of the households not using LPG as their primary fuel have a lower WTP than the current effective monthly cost of subsidized LPG and hence would need additional support to enable their cooking energy transition.

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  • Chindarkar, Namrata & Jain, Abhishek & Mani, Sunil, 2021. "Examining the willingness-to-pay for exclusive use of LPG for cooking among rural households in India," Energy Policy, Elsevier, vol. 150(C).
    • Handle: RePEc:eee:enepol:v:150:y:2021:i:c:s0301421520308181
    DOI: 10.1016/j.enpol.2020.112107
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    4. Bigerna, Simona & Choudhary, Piyush & Kumar Jain, Nikunj & Micheli, Silvia & Polinori, Paolo, 2022. "Avoiding unanticipated power outages: households’ willingness to pay in India," MPRA Paper 114160, University Library of Munich, Germany.
    5. Adjei-Mantey, Kwame & Takeuchi, Kenji & Quartey, Peter, 2021. "Impact of LPG promotion program in Ghana: The role of distance to refill," Energy Policy, Elsevier, vol. 158(C).
    6. Tan, Yang & Fukuda, Hiroatsu & Li, Zhang & Wang, Shuai & Gao, Weijun & Liu, Zhonghui, 2022. "Does the public support the construction of battery swapping station for battery electric vehicles? - Data from Hangzhou, China," Energy Policy, Elsevier, vol. 163(C).
    7. Liu, Pihui & Han, Chuanfeng & Teng, Minmin, 2022. "Does clean cooking energy improve mental health? Evidence from China," Energy Policy, Elsevier, vol. 166(C).
    8. Ashok Kumar Sar, 2023. "Price estimation for Amazon Prime video in India," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(4), pages 312-318, August.
    9. Gill-Wiehl, Annelise & Brown, Timothy & Smith, Kirk, 2022. "The need to prioritize consumption: A difference-in-differences approach to analyze the total effect of India's below-the-poverty-line policies on LPG use," Energy Policy, Elsevier, vol. 164(C).

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