Off-farm work and rural residential energy transition: a farm-household model and empirical evidence from China

Abstract

PurposeThis paper aims to examine the role of off-farm work in the rural residential energy transition in China.Design/methodology/approachTo guide this empirical work, the authors present a simple farm-household model to explain rural energy consumption. The authors then empirically assess three main mechanisms through which off-farm work can speed up energy transition in rural China using panel data methods.FindingsThe study shows that income growth from off-farm work can reduce the consumption of traditional biomass energy and facilitate a shift to commercial energy. The losses of labor available for on-farm production raise the shadow price of non-tradable biomass energy and further dampen the demand for traditional biomass energy. More importantly, the authors find that working in service sectors can significantly promote the consumption of commercial energy by rural households. The sectoral exposure effect indicates that a new working environment may influence rural households' energy preferences and thus accelerate the transition away from traditional biomass energy.Originality/valuePrevious studies focus mainly on the income effect of off-farm work on rural energy consumption. The authors first identify three related but essentially different effects of off-farm work on rural energy transition in China. This study provides new insights into the process of energy consumption transition in rural China.