Determinants of Household’s Choice of Fuel for Cooking in Developing Countries: Evidence from Nepal

Abstract Using the Nepal Living Standard Survey (NLSS) data, this article identifies the determinants of household’s choice of energy for the purpose of cooking and verifies the energy ladder hypothesis (ELH). A multinomial logit model (MNL) is applied to fulfil this objective. It has been found that cleaner energy is more likely to be used in households where the head of the family has a higher level of education and a higher level of income, whereas larger households and households with higher proportion of dependent members, older person or female as head of the family and rural households are less likely to use cleaner energy. Households located in a place far from markets also do not choose cleaner energy. Further, the likelihood of using cleaner energy in the mountain and Terai regions is less than that in the hilly region. This article applies an ordered logit to the same set of data and confirms the robustness of the results. Suitable policy measures have been suggested to enable a transition towards cleaner sources of energy instead of inferior sources in Nepal.