The Link Between Energy and Poverty: Evidence of Benefits for the Poor

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The lack of access to electricity is a major barrier to increasing the welfare of households in the country. Literature suggests that increased electricity consumption tends to increase employment, total hours of paid work, the probability of participating in nonfarm or nonhousehold work, and improve education outcomes. This research has two objectives: (1) to create an energy poverty indicator using the energy access and consumption mix of households; and (2) to assess whether there exists a link between energy use (particularly electricity) and poverty in the Philippines using evidence from household data. The provision of electricity infrastructure may stimulate economic growth at the national, subnational, and household levels. Income and nonincome aspects of poverty may improve through opportunities for better education and increased productivity due to electrification of households. A cross-section econometric model is used to establish the relationship between energy consumption and poverty impact at the household level.