Households' fuel mix choices in Pakistan, and why policy change is necessary

As I mentioned in a post last June, indoor air pollution is a serious problem that kills an estimated 70,000 people annually in Pakistan, and about 1.6 million people globally each year (see here). Indoor air pollution is a serious problem for developing countries, so understanding why households (or more accurately, the people making decisions who live in households) choose to use fuels that lead to high levels of indoor air pollution (solid fuels such as firewood, animal dung, and crop residues) is important.

To date, most studies of fuel use have treated fuel selection as independent. That is, those studies make the assumption is that each household decides whether or not to use a fuel independent of their choices of whether the household also uses other fuels or not. The worst of those studies only consider the fuel that households use the most, and ignore the other fuels that make up the mix of fuels the household uses. Some better studies do look at fuel mixes, but the mixes that are investigated are pre-determined by the researchers, and therefore might not reflect the on-the-ground fuel mix selections of actual households.

In a new working paper, Muhammad Irfan, Gazi Hassan and I use household data from the 2013-14 Pakistan Living Standards Measurement Survey to look at the actual fuel mix selections of households and the non-price factors associated with fuel mix use. One important aspect of the paper is that we use cluster analysis to determine the fuel mixes that are used by households, and we identify seven fuel mix clusters, made up of different proportions of solid fuels (firewood, animal dung, and crop residues) and modern fuels (natural gas and LPG). Three of the fuel mixes use exclusively solid fuels (in different proportions), while the other four use a mixture of solid and modern fuels. For one of the latter four fuel mixes, households use on average 82% natural gas, 9.8% firewood, and small proportions of other fuels - we label this fuel mix as a 'clean' fuel mix, as it contains the highest proportion of the cleaner modern fuels.

We then look at the factors associated with choosing each fuel mix in preference over the other six options. There are many comparisons, so I won't go through them in detail. To summarise though, households that have higher income and education, and those that are in urban areas, are more likely to choose the clean fuel mix, while agricultural households and larger households (those with more people) are more likely to choose the fuel mixes that are predominantly solid fuels.

Given that income is one of the determinants of clean fuel mix selection, it is reasonable to ask whether Pakistan (as a middle-income country) could simply grow out of using solid fuels. We look at this question directly and find that this is unlikely, especially in rural areas. The most feasible way for Pakistan to shift households to cleaner fuel mix use is to promote the take-up of piped natural gas connections, especially outside large urban areas. In other words, it requires a clear policy change to drive a shift away from solid fuel use and the indoor air pollution it generates.