Assessing the effect of nonfarm income on the household cooking energy transition in rural China

Although the impact of nonfarm income on poverty and welfare has been fully recorded, far less is known about the relationship between nonfarm income and the rural household energy transition. This paper attempts to fill this gap by investigating the causal effect of nonfarm income on the rural household cooking energy transition. Based on nationwide data from the China Family Panel Studies (CFPS) conducted in 2018, we applied a two-stage instrumental variable (IV)-probit model to overcome the endogeneity challenges. The empirical results reveal that nonfarm income has a positive impact on clean cooking energy use. The marginal effect of agricultural income is not linear but U-shaped. After controlling for endogeneity, a 1% increase in annual nonfarm income results in an increase in the probability of clean cooking energy use of 3.9% (p