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Restoring Balance: Bangladesh’s Rural Energy Realities
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has the highest level of impact on both energy expenditures and the equivalent measure of income. As might be expected, lighting Standard energy has a greater effect on non-farm Variable Mean Deviation income than farm income. Conversely, Outcome (Tk/month) non-lighting energy has a greater effect Consumption 3,581 2,449 on farm income than non-farm income. Farm income 2,229 2,702 Thus, lighting is more important for nonNon-farm income 2,889 4,997 farm income, while non-lighting energy, Total income 5,118 5,950 such as diesel, is more important for farm income. After all, diesel can be Monthly energy use used for irrigation, which, as noted preNon-lighting (kgoe) 95.7 70.7 viously, is strongly correlated with farm Lighting (klm-hr) 115.6 267.7 productivity. Biomass (kgoe) 90.1 65.7 The effects of different types of Kerosene/diesel (kgoe) 3.5 9.5 energy consumption (biomass, kerosene/ Electricity (kWh) 25.7 252.3 diesel, and electricity) are even more Source: BIDS Survey (2004). interesting. Biomass energy is the fuel most commonly used by households in Bangladesh. An increase of 1 kgoe of biomass energy increases monthly household income by about Tk 8, most of which can be attributed to farm income. Moving up the energy ladder yields greater income gains. Use of kerosene or diesel fuel significantly raises farm income, likely resulting from diesel-powered irrigation. Use of 1 kgoe (about 1 liter of fuel) increases farm income by approximately Tk 149, significantly higher than its cost. Of all fuels, electricity has the greatest effect; 1 kWh contributes to raising non-farm income by Tk 4.7 and total income by almost Tk 16, which is equivalent to more than Tk 185 for 1 kgoe, a gain of more than 20 times that achieved from biomass use. Much of the Table 4.11. Summary Statistics of Outcomes and Energy Use Variables of Household Welfare Regressions
Table 4.12. Estimates of Household Welfare (Tk per month) Monthly Energy Use Model 1 Non-lighting (kgoe) Lighting (klm-hr) Model 2 Biomass (kgoe) Kerosene/diesel (kgoe) Electricity (kWh)
Consumption
Farm Income
Non-farm Income
Total Income
4.89** 4.32**
9.61** −0.19
3.80 9.68**
11.20** 9.39**
3.43** −18.00 7.43**
13.32** 149.07* −2.17
−10.37 −151.61 4.72**
8.18** −54.59 15.73**
Source: BIDS Survey (2004). Note: Figures represent changes in outcome (consumption and income) due to one unit change in energy use. * = significance level of 10 percent. ** = significance level of 5 percent or stronger.