Non-farm entrepreneurship, caste, and energy poverty in rural India

Abstract

This study examines how non-farm entrepreneurship influences rural household energy poverty and explores caste-based heterogeneities in outcomes in India. The study used different quasi-experimental econometric methods to analyse panel data from the waves 1 and 2 (2015 and 2018) of the Access to Clean Cooking Energy and Electricity Survey of States (ACCESS) in India. The overall results across all estimation methods show that households' engagement in non-fam entrepreneurship significantly contributes to a reduction in their energy poverty levels and the probability of being energy poor. The sizes of the reduction vary across the four castes (General Caste, Scheduled Tribe, Scheduled Caste, and Other Backward Caste). The energy poverty reducing effect of non-farm entrepreneurship is particularly high among members of the Scheduled Tribe. Further mediation analyses reveal that non-farm entrepreneurship potentially affects rural households' energy poverty through their accumulation of financial (savings) and durable assets which possibly enable them to access cleaner energy sources for lighting and cooking. We encourage governments to pay attention to policies that promote non-farm entrepreneurship which has the potential to enhance asset accumulation and reduce rural energy poverty in the process.