Exploring choice and expenditure on energy for domestic works by the Sri Lankan households: Implications for policy

Abstract The majority of households in developing countries rely on harmful energy sources for cooking and lighting due to socioeconomic constraints. This paper aims to examine patterns and determinants of household energy consumption choices using data collected from more than 55,000 Sri Lankan households under three rounds of Household Income and Expenditure Surveys (HIES-1990/91, 2002, 2012/13). This study uses a multivariate probit model to estimate the drivers of fuel choices and a Seemingly Unrelated Regression (SUR) model estimation procedure to investigate household dependency on energy consumption. The results show that economically affluent households headed by relatively more educated heads are more likely to choose and spend more on clean energy, such as electricity and liquefied petroleum gas (LPG). The findings of the study support the energy ladder hypothesis, which states that with an increase in income and awareness, households gradually switch from dirty energy, such as biomass, firewood, and kerosene, to clean energy. Based on these findings, this study suggests that energy, environment, and health policy in developing countries should focus on increasing the awareness of the consequences of using dirty fuel and making clean energy affordable to ensure access to less harmful, clean, and green energy at affordable prices.