A randomized trial of price subsidies for liquefied petroleum cooking gas among low-income households in rural India

The use of solid fuels for cooking is a major contributor to mortality, disease burden, and environmental harm in many countries. To tackle the problem, India expanded access to a cleaner and often subsidized alternative, liquefied petroleum gas (LPG), but solid fuels reliance has persisted. Aiming to inform LPG subsidy policy, we conducted a field experiment with low-income households in rural India to examine how LPG prices affect demand. Households (n = 580) were randomized to four groups: a control group that received no discount beyond the existing subsidy and three treatment groups that received discount vouchers worth US$1.7, US$3.4, and US$5.1 per cylinder refill. Purchases of LPG cylinders increased significantly with the size of the discounts. The findings indicate that higher LPG subsidy amounts will be necessary to achieve near exclusive use of this cleaner cooking fuel among low-income Indian households, in support of health and environmental goals.

Duke Scholars

Author Marc A. Jeuland Sanford School of Public Policy