Pakistan Institute of Development Economics



Factors Influencing Choice of Energy Sources in Rural Pakistan

Modernisation of the agricultural and industrial sectors inPakistan over the last thirty years, increased village electrification,increasing use of energy appliances by domestic users, and the usage ofmodern technology in all sectors, caused energy demand to increase morerapidly than energy supply. Sources of energy vary between urban andrural populations, across income groups, and by type of households.Pakistanis consume energy from both modern and traditional sources fordifferent purposes, such as lighting, cooking, heating, andtransportation. Modern sources of energy include electricity, oil, gasand coal, while traditional sources consist of animal/plant residue(firewood, crop residue and animal waste). Using a multinomial logitregression model, this study analyses how rural households make choicesamong different energy alternatives. The results suggest that because ofthe limited access to modern energy sources, households rely ontraditional sources excessively, which may have a negative impact notonly on human and animal health but also on the environment. Theseresults suggest that the conversion of traditional energy sources intomodern ones, such as, biogas, use of energy efficient appliances, etc.can have a positive impact on the environment and sustainable economicgrowth. JEL Classification: R20, D11, Q43, Q42, Q5 Keywords: Rural,Households, Energy Consumption, Energy Sources, Environment

Muhammad Saad Moeen,

Asjad Tariq Sheikh,

Muhammad Saqib Shahzad Saleem,

Shehryar Rashid