The need to prioritize consumption: A difference-in-differences approach to analyze the total effect of India's below-the-poverty-line policies on LPG use. (May 2022)

• Record Type: Journal Article
• Authors: Gill-Wiehl, Annelise; Brown, Timothy; Smith, Kirk
• Is Part Of: Energy policy. Volume 164(2022)
• Publication Date: 2022-05
• Subjects: LPG -- PMUY -- DiD analysis -- Clean cooking -- India; ACCESS Access to Clean Cooking Energy and Electricity Survey of States -- APL Above the Poverty Line -- BPL Below the Poverty Line -- CEEW Council for Energy, Environment, and Water -- DiD Difference in Differences -- LPG Liquified Petroleum Gas -- PMUY Pradhan Mantri Ujjwala Yojana -- RCT Randomized Control Trial -- SC Scheduled Caste -- ST Scheduled Tribe -- WTP Willingness to Pay; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2022.112915
• Languages: English
• ISSNs: 0301-4215

Abstract

Abstract: In 2016, India introduced the Pradhan Mantri Ujjwala Yojana (PMUY) policy, which offers below-the-poverty-line (BPL) households a free liquified petroleum gas (LPG) connection. Simultaneously, the National and State governments implemented numerous health, housing, and other programs also targeting BPL households. Using a difference-in-differences approach with a non-equivalent comparison group, we provide causal evidence of the total effect of BPL policies on the probability of obtaining an LPG connection, overall LPG consumption, opting for home delivery, and clean cooking access. Using a two-part model of LPG use, the total effect of the policies is a 7.9 and 8 percentage point increase (46.4% and 50.0% change) in the probability of an increase in any positive LPG use for BPL households but no change in the magnitude of LPG use among households with any positive LPG use. We calculate that the overall increase in LPG use due to BPL policies was 0.68 kg per household. We find no effect for home delivery or cooking energy access tier. Our work suggests the need to expand the policy to address consumption more effectively. Finally, this analysis advocates investigation into consumption incentives and the size of the refill subsidy beyond simply improved targeting of BPL households. Highlights: Below-the-poverty-line (BPL) policies result in a ∼40% change in LPG adoption. BPL-households increased their overall LPG use by 0.68 kgs relative to the ineligible. BPL policies do not impact cooking energy access tier. Aggressive policy should expand to increase the entire population's LPG consumption. Consumption incentives and income-stratified refill subsidies may be more effective.