Fuel choice for rural Tibetan households: Impacts of access to credit

Abstract

Evidence on the determinants of fuel choice by ethnic groups inhabiting special geomorphic areas is scant. Previous studies suggest that access to credit positively impacts the use of clean cooking energy. This study analyzes the effect of access to credit on fuel choice for rural Tibetan households in Lhasa, the Tibet Autonomous Region, and finds the opposite effect. We apply the recursive bivariate probit model based on a field survey dataset and find that access to credit significantly lowers the likelihood of the rural Tibetan households choosing only clean energy sources as their main fuels for cooking and heating. Further evidence demonstrates that access to credit increases the total income of rural households, as well as the number of yaks raised by those households. A by-product of this, the amount of readily available yak dung, thus also increases. This heightened use of non-clean, cash-free yak dung as a fuel overwhelms the positive effect of increased income on clean fuel adoption. We also find that the effects of access to credit vary with the household size, access to internet and the altitude of home location.