Household energy choice and consumption intensity: Empirical evidence from Bhutan

Abstract

This paper uses data from three Bhutan Living Standard surveys (BLSS 2003, BLSS 2007, and BLSS 2012) to examine the trends and patterns of household energy consumption, and identify and analyze the factors that influence household energy choices, consumption intensity and the per capita household expenditure on energy sources in Bhutan. During the last decade significant numbers of Bhutanese households have switched to cleaner energy sources. Empirical results show that a household׳s choice of cleaner energy sources is driven by income level and household wealth, the age, gender and education of the household heads, access to electricity, and location. Education and income have a differential role on the choice of clean or dirty fuel; wealthier and more educated households use and rely more on clean sources of energy like electricity and liquid petroleum gas while poorer households use and rely on dirty fuel such as fuelwood and kerosene. The study shows that female-headed households are more likely to choose cleaner fuels and, above all, the availability of a clean and cost-effective source of energy within proximity to the household is an important factor in the adoption of clean energy. Several models using a variety of alternative independent variables, such as proxies for education and wealth, were estimated and confirmed the robustness of the results.