Estimating the impact of rural centralized residence policy interventions on energy poverty in China

Abstract

With the world's second-largest rural population, China faces the complex challenge of energy poverty in rural areas, and it is important to identify effective policy tools to alleviate energy poverty. The Rural Centralized Residence (RCR), a rural development policy, has been implemented in 24 provinces in China since 2004. This study was consequently motivated to formulate a hypothesis that RCR could reduce energy poverty in China's rural areas. The study used field survey data on 3484 rural households and employed the instrumental variable method to test the above hypothesis. It demonstrated that RCR can significantly cause the decline of the energy poverty in rural China by 14.5 percentage points in terms of composite energy poverty index. Further analyses showed that RCR could significantly improve household income, use of energy-efficient materials, and energy infrastructure supply, ultimately reducing the energy poverty in rural China. The newly found effect of RCR on energy poverty and its relevant mechanisms could help policymakers in China and elsewhere to deliberate, adopt and implement similar policies.