Social interactions and household fuel choice: evidence from rural China

• Published in: Environment and development economics 2024-12, p.1-20
• Main Authors: Fang, Hang, Jiang, Xuechen, Chen, Qianheng, Delgado, Michael S.
• Format: Article
• Language: English
• ISSN: 1355-770X; 1469-4395
• DOI: 10.1017/S1355770X24000287

We study household fuel choice in rural China through the lens of social interactions, deploying a structural discrete choice interaction model to explain peer-dependence in household fuel choice. The data comes from the China Family Panel Studies 2010–2020, and we use multiple strategies to examine the robustness of the social interaction effects. We find a significant endogenous social effect, meaning that whether a household chooses non-solid clean fuel for cooking is directly affected by the choice in cooking fuel made by its neighbors in the village. Households with lower non-farm income are more sensitive to the choices of others, and the fuel choices of households with a higher education and/or a higher income attracts more attention from others. Modern communication technologies facilitate information exchange among rural residents, thereby strengthening the endogenous social effect. We suggest that public policies can accelerate rural energy transition by stimulating positive social spillovers.