Determinants of household adoption of clean energy with its rural-urban disparities in Bangladesh.

ABSTRACT

This study aims to investigate factors influencing the adoption of clean energy among households in Bangladesh, using Blinder-Oaxaca decomposition and extended probit regression model with data from the 2019 Bangladesh multiple indicator cluster survey. Small households, primarily Muslim and urban dwellers, who speak the Bengali language and are Internet and mobile users, were likelier to adopt cleaner fuels than their counterparts. On the contrary, households residing in the Barisal, Khulna, Rajshahi, and Rangpur divisions, belonging to poor and middle-class households, with household heads aged 15-64 and without formal education, were less likely to adopt cleaner fuels than their counterparts. The concentration curve revealed socioeconomic inequality in the adoption of clean energy, particularly favouring richer households in urban and rural areas. Further analysis using the Blinder-Oaxaca decomposition showed that urban residents showed a higher probability of adopting clean energy, with a significant difference of 0.508 compared to rural areas. Regarding the endowment effect, poor wealth quintile contributed the most, followed by the ownership of rented dwellings and the middle wealth quintile. The Bengali differential effect made the largest contribution to this aspect of the disparity, followed by the exposure of the Internet and the influence of the Dhaka and Chattogram divisions. The detailed analysis provides valuable insights for policymakers and practitioners on the issue of disparities in the adoption of clean energy between urban and rural areas in Bangladesh.