Asset Endowments Research Articles

ANALYSIS OF WORKING CAPITAL EFFICIENCY FOR ARABLE CROP FARMS IN HUNGARY

Our study is a thematic analysis of the literature on working capital, aiming to present the latest research and interpretations on working capital management. In the second part of the paper, we present an assessment of capital adequacy and working capital efficiency and their results, based on our own data collection and compared with the findings of the literature. There is a substantial international literature on the impact of working capital, which examines the returns and the impact on profitability of the stock of inventories, the turnover of various current assets and the cycle days associated with working capital management. In our study, we used these aspects to select asset endowment and turnover-income profitability indicators from the EMIS database for Hungarian arable crop farms, searching for correlations by regression analysis for three years 2018, 2020 and 2022. Our results show that working capital endowment specifically showed significant correlations with operating revenue in all three years, while the other explanatory variables mostly gave significant correlations only for the year 2022. The size of the Hungarian agricultural economy is specifically characterised by micro and small enterprises, therefore we categorised the enterprises into micro, small, medium and large enterprises based on the value of their assets and their revenue. The number of enterprises specifically engaged in cereal and oilseed production by size category thus differed significantly, and multivariate regression was no longer possible for the two larger categories. In these cases, correlation analysis preceded regression analysis. Examining working capital efficiency by firm size, small farms showed significant correlations with profitability, but they also tended to do so only for the year 2022.

The responsiveness of household asset endowment to child health outcomes in Cameroon: the role of women empowerment

The responsiveness of household asset endowment to child health outcomes in Cameroon: the role of women empowerment

Household Livelihood Strategies and Forest Resource Use in Rural West Bengal, India

The economic contributions of forest resources to the well-being of rural households are enormous. However, the level of forest benefits and degree of forest reliance vary across households. Drawing on a sustainable livelihood framework, this article explores how these forest resource uses correlate to the choice of livelihood strategies of rural forest-dependent households with a specific focus on the increased income of households, filling income shortfall, coping with shocks and livelihood diversification. Data were collected from 407 rural forest-dependent households in West Bengal, India. Based on the share of forest income in total household income, households were classified into different livelihood strategy groups. One-way ANOVA was run to test the income differences among these groups. The forest extractive strategy was found least income-generating of all livelihood strategies. Multinomial logit regression was carried out to identify the asset-based explanatory variables that influence livelihood strategy choices and forest dependency of the studied households. Analyses show that households’ differential access to or endowment of livelihood assets determines the choice of a rural household’s livelihood strategy and that forest resource uses of the households are livelihood strategy driven. Asset-poor households should be given opportunities to pursue livelihood activities with higher economic returns. JEL Classifications: Q23, Q56, Q57

Gender bias in university student mobility: a cohort analysis in Italy

PurposeThis paper aims to assess gender bias in Italian university student mobility controlling for the field of study. It uses data from the Italian National Student Archive (Anagrafe Nazionale degli Studenti – ANS) for the cohort of freshmen enrolled in the 2017 academic year. The macro-regional comparison unfolds across the following areas: North and Centre, Southern Italy and main Islands (Sicily and Sardinia).Design/methodology/approachThe analysis is firstly carried out at the national level, and secondly, it focusses on macro-geographical areas. University mobility choices are thus investigated from a gender perspective, conditioning upon other theoretically relevant characteristics collected for the prospective first-year university student population enrolled in 2017. The authors analyse data in a regression setting (logit models) within the multilevel framework, which considers students at level 1 and the field of study at level 2. Gender differences in the propensity to be a mover – conditional upon the choice of the field of study – were captured by introducing random intercepts to account for clustering of students in fields of study and random slopes to allow the gender effect to differ among them.FindingsFindings show that university student mobility in Italy leads evidence of gender bias. This has been detected using a multilevel random slope approach that allowed the authors to jointly estimate a slope parameter for gender within each field of study. Moreover, using a regression setting allowed the authors to control for heterogeneity in geographical, educational and socio-demographic characteristics across students. In line with previous empirical findings, the authors' data highlight the presence of a relevant mobility flow of university students from the South toward the North-Centre of Italy and lower mobility of female students compared to male students from the South and Islands.Originality/valueTo the best of the authors' knowledge, there are no studies in Italy, which investigate if families' investment in higher education in terms of selection of no-local universities are affected by gender bias and if geographical differences in this behaviour between macro-areas are in place. Thus, investigating students' choices in tertiary education allows the authors to shed light on the presence of gender bias in families' education strategies addressed to increase the endowment of students' assets for future job opportunities.

Livelihood strategies, baobab income and income inequality: Evidence from Kordofan and Blue Nile, Sudan

This paper analyses the relationship between livelihood strategies, baobab income, and income inequality in rural Sudan. Baobab is an emerging commercial crop with emerging specialised value chains in Kenya and Malawi. In Sudan, baobab traditionally has been used with limited research on evolving business opportunities and associated implications for rural development. The study utilizes survey data from 374 randomly sampled households from two states in Sudan (Kordofan and Blue Nile) and examines livelihood strategies, income inequalities and the role of baobab income for rural households. We use principal component analysis (PCA) and hierarchical cluster analysis to identify three household clusters in each region based on the income sources. In Kordofan, the identified strategies were ‘livestock and baobab-based’, ‘livestock and crop-based’, and ‘business-based’. In Blue Nile, they were ‘mixed’, ‘business-based’, and ‘crop-based’. The clusters exhibited variations in asset endowments and wealth, with differences in access to land, savings, credit, and technology. Households classified under the livestock-baobab strategy (Kordofan) and the mixed strategy (Blue Nile) had the highest degree of poverty, lowest per capita income, and baobab contributed 33% and 26% of total income, respectively, underscoring the importance of baobab income to the livelihood security of poorer households. To analyse inequality in distribution of income Gini coefficients are estimated for regions and livelihood strategy categories. Baobab income contributes to reducing income inequality: 10% increase in baobab income reduces inequality by 6.5% and 11% in Kordofan and Blue Niles, respectively, but shows also in Kordofan better off households generate higher incomes from baobab.

Endowments as a Tool for the Shaping of Community Identity in the Jewish Society of Egypt, Palestine, and Syria

Abstract Talmudic sources recognize the dedication of assets for the benefit of the Temple alone (heqdesh). In Islamic countries, Jews encountered another form of asset endowment – the Islamic waqf – and fully embraced it. This article explores the utilization of waqf from a fresh perspective, focusing on urban communities in Egypt, Palestine, and Syria, to examine its role in constructing community members’ self-identity. The allocation of waqf beneficiaries allowed the endower to delineate the community’s boundaries in their mind, reflecting the desired social circles they sought to be part of. Analyzing documents spanning centuries reveals ongoing changes in this realm. Social and demographic shifts periodically led to reductions in the circles of waqf beneficiaries. The strained relations between Rabbanites and Karaites during the Mamluk Period, as well as waves of Jewish immigration from Europe and North Africa to the eastern Mediterranean in the late Mamluk and early Ottoman periods, influenced the norms governing the endowment of houses, land, and money among Jewish property owners. These norms evolved again during the late Ottoman period when the boundaries between different Jewish groups became more blurred.

Vulnerability of communities' livelihoods to the impacts of climate change in north-western highlands of Tanzania

Climate change has emerged as one of the critical challenges to human well-being. Changing climate places direct and indirect impacts on human activities and is mainly triggered by non-climatic stressors, which are diverse and inherent in many communities. However, there has been diversity in how climate and non-climatic stress factors affect human well-being and thus requiring locally specific contextualisation of how climate change is driving change in many ecosystems. This study analysed climate and non-climate factors for communities' vulnerability and impacts using a landscape approach in selected villages in the western highlands of Tanzania, specifically in Kasulu and Buhigwe districts in Kigoma Region. The aim was to understand communities' vulnerability to the impacts of climate, and non-climate processes, particularly with regard to livelihoods and impacts, particularly in forest resources. Study sites and respondents were selected through simple random and purposive sampling methods. Data were collected through household surveys, key informants interviews, and focus group discussions. Meteorological data were used for the analysis of climatic changes. Quantitative data analysis tools included meteorological statistics software such as CLIDATA, INSTAT, XLSTAT and SPSS. Theme-content analysis was used to analyse qualitative data. Findings indicate inter-annual and seasonal variabilities of rainfall and temperature levels from the normal across the study sites. The study revealed significant increasing trends for mean annual Maximum and Minimum temperature. Significant changes in rainfall patterns were decreasing seasonal and annual rainfall trends, unreliable onset and cessation, and erratic seasonal rainfall. The maximum decline of seasonal rainfall had slope values of −14.51, while the maximum decline of annual rainfall trends had a slope value of −12.76. The minimum decline for seasonal rainfall had slope values of −2.17, and annual rainfall trends had slope values of −1.36. Villages in the highland zone were found to be highly vulnerable to the impacts of climate change and non-climate stress factors, with a 0.61 vulnerability index value. Major climate stress factors for communities' vulnerability included seasonal variability of rainfall and temperature increase, which influenced the increase of pests and diseases and other unfavourable climatic conditions that affect crop production and livestock keeping. The effects, directly and indirectly, influenced the low agricultural yields and decreased income. Non-climate stress factors such as landscape characteristics, mobility, inadequate extension services, and low household asset endowment might have been accelerating communities' vulnerability to the effects of the changing climate. Moreover, the study shows the climate change on a community's resilience. Generally, changes in climate conditions result in many adverse consequences and have been influencing communities' vulnerability.

Climate shocks, vulnerability, resilience and livelihoods in rural Zambia

ABSTRACT Climate and weather shocks pose risks to livelihoods in Southern Africa. We assess the extent to which smallholders are exposed to climate shocks in Zambia and how behavioural choices influence the negative effects of these shocks on vulnerability and resilience. We use household data from the nationally representative Rural Agricultural Livelihoods Survey and employ an instrumental variable probit regression model to control for the endogeneity of key choice variables. There are four main findings. First, droughts are the most prevalent climate shock faced by rural smallholder farmers in Zambia, but the extent of exposure differs spatially, with the Southern and Western Provinces being the hardest hit. Nationally, 76% of all smallholder farmers are vulnerable and only 24% are resilient, with female households most vulnerable. Second, increased climate shocks correlate with both increased vulnerability and reduced resilience, with short- and long-term deviations in seasonal rainfall worsening vulnerability and resilience. Third, higher asset endowments and education are correlated with reduced vulnerability and increased resilience. And last, climate-smart agricultural practices significantly improve household resilience. These findings imply a need to support scaling of climate-smart agricultural technologies and to invest in risk mitigation strategies such as weather-indexed insurance and targeted social cash transfers.

Livelihood diversification and migration intentions among land-poor youth in Tigray, Northern Ethiopia: do they correlate with livestock assets, trust, and trustworthiness?

Youth unemployment has been prevalent in Ethiopia. Over the past decades, efforts to rehabilitate degraded communal lands have been taking place in Ethiopia. This has created the opportunity to organize landless and land-poor youth and implement a policy of allocating rehabilitated lands for youth to engage in agriculture as a livelihood option. However, whether these rural youth will remain in agriculture or choose other livelihood options including migration, and how their trusting behaviors (trust and trustworthiness) and other factors influence their choices are worth investigating and are the aims of this study. This will help our understanding of what would incentivize the youth to enhance their livelihoods. We used data collected from samples of 1,138 youth group members in the 2016 survey and from 2,427 youth group members in the 2019 survey in five districts of the Tigray region of Northern Ethiopia. Our results from panel data multinomial logit and probit models show that the number of oxen, access to land in the land rental market, and income from youth group activity significantly correlated with youth group members' choices for livelihood options and planning for migrating out of the country. A higher number of oxen owned by the youth group members are associated with a higher likelihood that the youth choose agriculture as a livelihood. Youth group members with a larger number of oxen are also less likely to plan for migration. We also found that more trusting youth group members are more likely to choose off-farm employment relative to staying in agriculture than less trusting members. More trustworthy members are less likely to migrate and more likely to stay in agriculture because trustworthiness is associated with better access to land in the rental market. Thus, improving youth group members' access to land and their asset endowments such as oxen for increasing the productivity of youth group activity and hence income would incentivize youth group members to stay in agriculture and enhance youth group activity as a sustainable livelihood.

Accounting for Heterogeneity among Youth: A Missing Link in Enhancing Youth Participation in Agriculture—A South African Case Study

Youth participation in the agricultural sector remains key to addressing youth unemployment. Young people represent a heterogeneous social group with markedly diverse social and economic needs that require tailor-made support interventions to enhance their participation in agricultural activities. The main objective of this article was to develop distinct youth typologies informed by diverse endowment of livelihood assets, including the psychological assets and entrepreneurial characteristics that shape young people’s career and livelihood choices, including participation in agriculture. A two-stage multivariate analytical approach was applied using principal component analysis (PCA) and cluster analysis (CA) to formulate youth typologies. Seven clusters were identified. The seven distinct clusters representing youth typologies were named “Training beneficiaries with access to extension”, “Job secure”, “Females endowed with negative psychological capital”, “Opportunist and determined livestock farmers”, “Social grant reliant”, “Resource poor traditional livestock farmers” and “Non-farming income with access to credit”. The results confirm that young people are indeed a heterogeneous group with diverse support needs. Unpacking the interrelated and multidimensional complexities among the youth is a vital take-off point to inform effective policy and tailor-made support interventions and effectively foster active youth participation in agriculture and related activities. We argue that support initiatives should not only address access to physical resources, but should also foster the development of soft skills such as entrepreneurial skills and boosting the psychological capital of young people while addressing gender inequalities.

Pastoralists’ and agro-pastoralists’ livelihood resilience to climate change-induced risks in the Borana zone, south Ethiopia: Using resilience index measurement approach

This study was conducted in the Borana zone, Oromia region, southern Ethiopia, with the aim of analysing the livelihood resilience of pastoralists’ and agro-pastoralists’ to climate change-related risks. A household survey was used to collect quantitative data, whereas qualitative data were collected via focus group discussions, expert group discussions, and personal observations. Descriptive statistics were used to analyse quantitative data, and content analysis was used to analyse qualitative data. The results show that frequent droughts, rising temperatures, and reduced rainfall are the major climate change-induced risks affecting the livelihoods of pastorals and agro-pastorals in the study area. Among the parameters tested, the greatest impacts of climate change-induced risks on pastoral and agro-pastoral livelihood systems were recorded for food [100%] and animal feed or pasture [99%], followed by livestock loss [95%], a decline in species dynamics [95%], and agro-pastoral land degradation [95%]. The average climate resilience index score of the Borena zone is found to be 0.328, implying that 32.8% of the respondents are resilient, with 0.163 [16.3%] pastoralists and 0.417 [41.7%] agro-pastoralists being resilient. However, all the results are below the scale of the minimum threshold [0.5 or 50%], implying that livelihoods and their households are poorly resilient. For the low resilience in Borena, limited access to basic services [0.26] and the adaptive capacity [0.29] of the pastoralists and agro-pastoralists contributed the highest share for resilience capacity compared to other major building blocks of resilience. However, of the two livelihood systems, pastoralists were found to have less resilience [0.249] compared to agro-pastoralists [0.407]. Besides the climatic factors, the resilience of pastoralists’ and agro-pastoralists’ livelihoods was affected positively and significantly by adaptive capacity and negatively and with statistical significance by the asset endowments of the households at P < 0.05. Therefore, policymakers should give pertinent attention to the reduction of the effects of climatic risks and increase the resilience of pastoral and agro-pastoral livelihood systems. Furthermore, actions that focus on increasing access to water, improving the rangeland generative capacity, diversifying the income sources, and providing timely and accurate early warning information are indispensable to building resilient livelihoods among the pastoral and agro-pastoral communities.

Rainfall shocks and inequality have heterogeneous effects on farmers' seed purchase decisions in East Africa

Weather shocks and poverty worsen seed and food insecurity in smallholder farming. Here we use rich and representative household-level data for Ethiopia, Malawi, and Tanzania, combined with historical monthly weather data to examine the effects of prior drought exposure and wealth (asset endowment) inequality on seed purchase decisions. We find that between a third and half of the farmers purchase seed, and among seed purchasers, more than half of the total seed volume used is purchased. We model seed purchasing decisions using Cragg double-hurdle models, which allow variables to have different effects on the probability and the intensity of purchase decisions. We find that drought shocks experienced in the past season encourage sourcing seed off-farm through purchase in the following season. On average, drought shock exposure increases seed purchasing for both improved and local seeds in Malawi and Tanzania while encouraging (discouraging) local (improved) seed purchases in Ethiopia. In all three countries, farmers better endowed with household assets increase seed purchasing, particularly for improved seeds, after a drought shock exposure. In addition, smaller farm sizes and low asset wealth endowments in all study countries are significant deterrents for buying seeds in the market, particularly improved seeds. Policies need to support both formal and informal seed systems and address inequalities in access to seed from formal seed channels to achieve seed and food security under elevated climate risk.

Determinants of Women Empowerment in Bishoftu Town; Oromia Regional State of Ethiopia

The purpose of this study was to determine the status of women's empowerment and its determinants using women's asset endowment and decision-making potential as indicators. To determine representative sample size, this study used a two-stage sampling technique, and 122 sample respondents were selected at random. To analyze the data in this study, descriptive statistics and a probit model were used. The average women's empowerment index was 0.41, indicating a relatively lower status of women's empowerment in the study area. According to the study's findings, only 40.9% of women were empowered, while the remaining 59.1% were not. The probit model results show that women's access to the media, women's income, and their husbands' education status have a significant and positive impact on the status of women's empowerment, while the family size of households has a negative impact. As a result, it is important to enhance women's access to the media and income, promote family planning and contraception, and improve men's educational status in order to improve the status of women's empowerment.

Determinants of adoption of enhanced cashew production technologies among smallholder farmers in Mtwara region, Tanzania

The appropriate use of improved technologies in cashew production can lift cashew productivity and income amongst cashew growing countries including Tanzania. The major motive of this study was to assess the adoption determinants of improved technologies in cashew production for enhancing country’s effort of attaining 1,000,000 MT of cashewnut production by 2025 from the current 238,576 MT. Multistage sampling was used to collect cross-sectional data from 760 cashew growers using a semi-structured questionnaire in Tandahimba and Masasi districts. Descriptive statistics were used to analyze the adoption rates whereas a Cragg Double hurdle model was used to analyze the determinant of enhanced cashew technologies. Results showed that the overall adoption of enhanced cashew technologies in Mtwara region was 58%. The findings revealed that the adoption intensity of pesticides application, recommended spacing, and the area under improved cashew trees were 88%, 32%, and 41% respectively. The outcomes revealed by Double Hurdle model indicated that the choice and extent of adoption were influenced by education, off-farm income, farm size, extension contacts, group affiliation, and credit access. Furthermore, cashew tree age, gender, asset endowment, and location influenced only the adoption decision of cashew production technologies. Therefore, the study urges for the inclusive policy agenda that will escalate land allocated for cashew production and off-farm earnings to enhance the adoption and intensity of enhanced cashew technologies. Moreover, results suggest the requirement for policy mediations that will accentuate the extension support and input credit services to heighten espousal of enhanced cashew technology in Tanzania.

Contract farming, animal epidemic disease outbreaks, and inclusive growth in rural China

ABSTRACT Contract farming (CF) is promoted as part of agricultural development policies in many countries. Few literature on CF has considered the animal epidemic risk, which significantly affects the total revenue and the re-distribution between the contract farmers and the enterprise. Using the ten-year nationwide household-level panel data, we investigate the Chinese poultry sector to analyse the inclusiveness of CF. We evaluate the impact of participating in CF on farmers’ income and asset endowments when animal epidemic diseases occur. The results confirm the insurance and discover the special re-distribution function of CF through adjusting product price. CF negatively affects large farmers’ poultry farming income while it could be mitigated during the animal epidemic disease outbreak. Meanwhile, participating in CF has a significant positive effect on small farmers’ assets when diseases occur. However, CF fails to be ‘inclusive’ in the presence of risks. The above positive effect is limited due to overall fewer participation opportunities available to small farmers. Policy implications and suggestions are derived to improve the inclusiveness of CF to small household farmers.

Using assets as resilience capacities for stabilizing food demand of vulnerable households

In the absence of governmental welfare support, assets have an important role in determining the capacity of vulnerable households of being resilient against economic shocks affecting their food needs. By focusing on the context of Sub-Saharan Africa, this paper analyses household responses in food demand to shocks affecting their food purchases. We analyze the effects of non-agricultural assets, livestock ownership, and crop stocks on stabilizing poor household's food demand by integrating them as proxies for resilience capacities into a Quadratic Almost Ideal Demand System. We find that those non-agricultural assets mostly reduce the sensitivity of demand of poor households for protein foods, pulses, and greens. Hence, poor households' demand for core nutrition items can be made more robust to shocks if their endowment of non-agricultural assets that raises their resilience capacities is improved. This can be achieved by establishing insurance packages as in the case of weather index-based insurance for smallholder farmers, or upscaling interventions that increase and stabilize households' assets.

Influences of climate change and land use change on the interactions of ecosystem services in China’s Xijiang River Basin

Ecosystem services (ES) emerge from the complex interactions of diverse ecosystem components. In turn, the provision of ES is influenced by how they are put to use and environmental drivers such as climate change and land use change (CC-LUC). Researches into CC-LUC impacts on ES have so far focused on biophysical supply rather than ES interactions, making it difficult to design appropriate strategies for natural capital investment and the consequent ecosystem benefits for human well-being. In this study, we built networks from correlations among climatic forcing, land-use intensity and ES for the Xijiang River Basin in southern China, a rapidly urbanizing region with rich endowments of ecosystem assets. The variations in network structure were evaluated under different climate and land use projections up to 2035. We found that the CC-LUC-ES networks were more sensitive to land use change which affected the network structure either by directly influencing biophysical ES supplies or indirectly through altering ES interactions. Sustainable land-use management (i.e., ecological protection priority scenario) coupled with the RCP4.5 emission scenario showed higher improvements for both water-erosion prevention and regulating services. Whereas increasing land-use intensity (i.e., economic development priority scenario) with RCP8.5 resulted in losses of ES synergies and a more heterogenous network of greater integrity. Our approach provides a comprehensive view of the relationships among multiple ES and how they respond to CC-LUC, which can be applied to advance mechanistic hypotheses for ES variations. The results of this study can inform sustainable management strategies by regulating ES interactions in watersheds.

Household Groups' Land Use Decisions Investigation Based on Perspective of Livelihood Heterogeneity in Sichuan Province, China.

Land use decision-making is a vital livelihood strategy associated with the rational collocation of livelihood asset endowments by rural households. Based on the perspective of livelihood heterogeneity, this paper collected the data from 540 farm households in 27 villages in three Sichuan Province counties to identify the land use decision-making characteristics of the household groups. A land use decision-making framework (LUDF) based on the sustainable livelihood framework (SLF) was established and dynamic and dual indicators were developed to divide the sample into six household groups. The household livelihood capital, livelihood strategies, and livelihood diversity were then analyzed at the regional and household group level, and the land use decisions of these household groups were explored, from which the following was found. (1) Overall livelihood capital in the study area was low, and except for human assets, there were few other assets, with households in the survey areas being more inclined to engage in non-farming livelihood activities; however, households in Nanjiang and Qionglai had greater livelihood activities choices than Luxian. (2) The LL-type household was the chief household group; the household group distribution in Qionglai was well-proportioned but uneven in Nanjiang and Luxian; and the HL-type, ML-type, and LL-type household livelihood strategy choices were polarized. (3) Most households were involved in land self-cultivation, followed by land transfer-in, land transfer-out, and land abandonment households. Specifically, there were more households that cultivated fragmented landholdings than specialized households with large-scale landholdings, the land transfer rate was relatively low, the transfer-in land area was far greater than the transfer-out land areas, and a small number of households that had abandoned their land were still involved in agricultural production. (4) There were obvious discordant human–land relationships and inefficient land uses in the study area. Based on these findings, relevant policy recommendations are given to improve farm household livelihood capital, optimize livelihood strategies, and assist in land use decision-making.

A comparative study of farming and fishing households’ livelihood vulnerability in the Niger Delta, Nigeria

Multiple stressors such as climate shocks, environmental degradation and resource conflicts may pose a great challenge for African communities struggling to adapt to climate change. Yet, there is limited empirical evidence on the differential vulnerabilities of farming and fishing households to these triple stressors. Using a household survey in the Niger Delta region of Nigeria, we compare the vulnerability of farming and fishing households. We find that the farming households were more exposed to the triple stressors while the fishing households were more sensitive to the triple stressors owing to their poor physical and natural asset base. In addition, we find that the two groups share similar adaptive capacity and composite vulnerability scores. Overall, interventions such as credit schemes can enable fishing households to address their livelihood disruptions and build their asset endowment, and climate-responsive interventions such as early warning systems can partly reduce the climate exposure of farming households.

Ethnicity/caste-based social differentiation and the consumption of clean cooking energy in Nepal: An exploration using panel data

Using a three-year panel data (2016–2018) of about 6000 households per year in Nepal, this study assesses the association between ethnicity and caste-based social differentiation and the consumption of clean cooking energy. This study applies a random effect logit model for analysing the factors explaining the choice of clean cooking energy and, in particular, the role of ethnicity/caste. To further examine the clean energy gap among different ethnicities and castes, this study applied exogenous switching treatment effect regression (ESTER). The results show that Dalits and Ethnic minorities are less likely to use clean cooking energy and the findings remain the same across all reasonable model specifications. More disaggregated analysis shows that Madheshi Dalit households are worse off, followed by Hill Dalit, Madheshi low-caste, Terai Adivasi, Other ethnic groups, and Hill Chhetri. The results of ESTER show that the difference observed in the use of clean cooking fuels between ethnic minorities and others is better explained by their base heterogeneity effects, while the clean cooking fuel differences between Dalits and non-Dalits are explained by both base heterogeneity and the treatment effects. It means that, unlike non-Dalit ethnic minorities, Dalits faced differential treatment due to their low caste position as well as their low-endowment ownership. Another major finding is that differences in endowment and education level largely explain differences in energy use. Hence, while assessing differences in energy use by caste/ethnic groups, one must control for the endowment and other human capital differences across the households that fall under different income or consumption quantiles. Clean energy policy should focus on improving access to clean energy, and it should pay particular attention to the Dalit communities and, to some extent, non-Dalit minorities by providing easy access and improving their purchasing power by increasing their asset endowment and income.