Centre for Development Economics
Department of Economics, Delhi School of Economics


Who is Buying? Fuelwood Collection in Rural India


Ujjayant Chakravorty

Tufts University, Massachusetts

Tuesday, 1st December 2015 at 3:00 PM

Venue : Seminar Room (First Floor)
Department of Economics, Delhi School of Economics

All are cordially invited

Fuelwood collection is often cited as the most important cause of deforestation in many developing countries. There is a significant literature on fuelwood markets but almost no studies on who is using the fuelwood collected. Is the fuelwood collected in rural areas used locally or by people living in nearby towns and cities? The answer to this question has implications for both environment and energy policy. We study this issue by looking at the effect of reduced forest cover on the time allocation of buyers and sellers of fuelwood in rural India. We instrument time spent in fuelwood collection by the time it takes to travel from their home to the collection site. By matching two different datasets, we can partition households that buy fuelwood for their own use from those who sell fuelwood in markets. We see a clear difference in the time allocation of these two groups in response to costlier access to forest resources, as measured by travel time. When the forest is further away, fuelwood is scarce and sellers decrease their time invested in self-employment activities. Buyers show no such trend in their behavior. Closer to town, sellers increase their collection effort, because fuelwood is likely to fetch higher prices. Again, buyers do not exhibit the same pattern. We find that the number of fuelwood sellers rises closer to town and controlling for population, fuelwood sales increase. The main contribution of the paper is in disentangling fuelwood markets into buyers and sellers, and estimating an excess supply function of fuelwood as a function of distance from town. About a third of the fuelwood collected is shipped out of the village, equivalent to about one million barrels of crude oil per day. Since most of this fuelwood is used for cooking using low efficiency stoves, this practice may have a significant effect on indoor air pollution in towns.

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