Measuring and Analyzing the Welfare Effects of Energy Poverty in Rural China Based on a Multi-Dimensional Energy Poverty Index

Abstract

This paper aims to measure and analyze the extent and determinants of energy poverty in China and to examine the effects of electricity accessibility on rural development and welfare. It constructs a multi-dimensional energy poverty index based on five dimensions: household cooking fuel, lighting, household electrical appliance services, entertainment/education, and communication. Using the instrumental variable of the 2SLS method and the hierarchical logit model, this paper also explores the impact of electricity accessibility in rural areas on the multi-dimensional energy poverty index, rural expenditure and income, and individual health and education outcomes. The results indicate that the multi-dimensional energy poverty index has experienced a downward trend over the years, yet it remains higher in rural areas compared with urban areas and in central and western regions compared with eastern regions. Electricity accessibility has a notable effect on reducing multi-dimensional energy poverty and promoting rural development, but it varies by region and rural expenditure quantile. Unclean cooking energy in rural households markedly reduces individual educational levels and increases the probability of ill health. In conclusion, this paper suggests that improving electricity accessibility and promoting clean cooking energy are important policy measures for alleviating energy poverty and improving rural welfare in China.