Adding fuel to fire? Social spillovers in the adoption of LPG in India


In many developing countries, many households, especially in rural areas, are still heavily reliant on solid biomass as a cooking fuel, despite its negative health and environmental implications. Liquefied petroleum gas (LPG) is a clean alternative, but its higher cost implies that its use is often limited to the richer, urban areas of a country. This paper focuses on the Indian context and investigates, over a relatively long time-frame, whether social spillover effects might have played a role in a household’s decision to use LPG, and how these effects varied across different sub-populations. Using data from several waves of the National Sample Survey (NSS), the recent ACCESS survey, and the India Human Development Survey (IHDS), this paper provides multiple strands of evidence that, taken jointly, suggest that positive social spillovers are present. Spillovers are also found to be stronger for households that belong to social networks, than for households that do not belong to any network. Our results provide partial evidence on convergence in LPG use rates across subgroups of the Indian population, and have strong implications for policy-makers around the world who could leverage lessons from social learning to encourage consumers to switch to cleaner sources of energy.