HOUSEHOLD ENERGY USE, INDOOR AIR POLLUTION, AND HEALTH IMPACTS IN INIDA [i.e. India]: A WELFARE ANALYSIS

Abstract

This dissertation develops a unified analytical framework to understand the relationships among household energy use, indoor air pollution (IAP), and health impacts and enables policy-makers to analyze welfare effects of various interventions.

This unified analytical framework includes four interlinked modules. Module 1 studies the determinants of IAP and constructs an IAP index to predict typical IAP exposure. Module 2 analyzes the impacts of IAP exposure on health, including both self-reported respiratory symptoms and physician-measured spirometry indicators. Module 3 uses a novel approach to model household behavior regarding energy technology choices based on utility maximizing behavior. Households are assumed to choose a cooking energy technology based on its attributes: cooking cost, convenience, and cleanliness. Household valuation of these attributes depends on household characteristics. Then based on the household utility function estimated from Module 3, Module 4 evaluates welfare change from various policy interventions.

Empirical estimation relies primarily on two surveys recently conducted in India: a social science and environmental health survey entitled Health, Environment, and Economic Development and a multi-topic national representative sample survey called

the India Human Development Survey. The two surveys were fielded between late 2004 and early 2005 and contain uniquely rich information on household energy use, indoor air pollution levels, and health indicators.

This dissertation provides quantitative evidence that IAP has significant health impacts comparable to smoking. Based on analysis of IAP impacts on spirometry indicators, the evidence suggests that IAP has major impacts on restrictive lung disease rather than obstructive lung disease. These results explain why certain diseases are more highly associated with IAP exposure. Considering that traditional biomass will likely continue to be the most popular cooking fuel in rural areas of India in the near future, and that households can achieve considerable welfare gains from improvement in stoves and kitchen ventilation, the analysis suggests that the Indian government should consider reviving the improved stove program with a new advanced stove strategy coupled with conducting advocacy campaigns on how to improve kitchen ventilation. The analysis suggests small overall welfare effects of the pending phasing out of LPG subsidies.