Fuel switching and infant health: evidence from the LPG subsidy in Indonesia

Crawford School of Public Policy | Arndt-Corden Department of Economics

Event details

PhD Seminar (Econ)

Date & time

Friday 26 May 2017


Coombs Extension 1.13, Coombs Extension Building, Fellows Road, ANU


Imelda, University of Hawaii.

Imelda uses the largest fuel-switching program in Indonesia to identify a causal impact of cooking fuel choice on infant mortality. After the liquid petroleum gas (LPG) subsidy program went into effect in 2007, the number of households using kerosene significantly decreased and the number of households using LPG significantly increased, from 42 per cent to 12 per cent and from 9 per cent to 46 per cent, respectively. Using the Indonesian Demographic and Health Surveys, Imelda applies a difference-in-differences approach to compare changes in infant mortality between treated and untreated regions before and after the program. The results show that infant mortality decreased by up to 1.3 percentage points as a result of the program, with the largest reduction happening during the first seven days of life (early neonatal period). This evidence supports the biological mechanisms in which weak fetal development via maternal exposure to pollution appear to be critical.

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