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Startup Costs and the Decision to Switch from Firewood to Gas Fuel
John H. Y. Edwards and Christian Langpap
Vol. 81, No. 4 (Nov., 2005), pp. 570-586
Published by: University of Wisconsin Press
Stable URL: http://www.jstor.org/stable/4129683
Page Count: 17
You can always find the topics here!Topics: Prices, Fuel consumption, Credit, Subsidies, Household consumption, Startup costs, Alternative fuels, Simulations, Market prices, Unit costs
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Firewood remains a key source of energy for households in developing countries, contributing to forest degradation and deforestation. The adoption of alternative fuels may be hindered by high startup costs, and this problem may be compounded by restrictions in credit availability. We use survey data to examine how credit access affects firewood consumption in Guatemala. Our results suggest that access to credit plays a statistically significant role in determining firewood consumption through its effect on the ability to purchase a gas stove. However, simulations suggest that these effects are small and that subsidizing stoves would be a more promising policy for reducing firewood consumption.
Land Economics © 2005 Board of Regents of the University of Wisconsin System