capital management in mutual financial institutions abstract capital management by mutual financial institutions such as credit unions provides a valuable testing ground for assessing the impact of capital regulation and theories of managerial behaviour in financial institutions limited access to external equity capital means that capital accumulation must be met primarily by reliance on retained earnings to deal with shocks to the capital position and avoid breaching regulatory requirements managers will aim to have a buffer of capital in excess of the regulatory minimum moreover mutual governance arrangements and an absence of capital market discipline mean that managers have discretion to set target capital ratios which differ significantly from industry averages this paper develops a formal model of capital management and risk management in mutual financial institutions such as credit unions which reflects these industry characteristics the model is tested using data from larger credit unions in australia which have been subject to the basel accord risk weighted capital requirements since 1993 the data supports the hypothesis that credit unions manage their capital position by setting a short term target profit rate return on assets which is positively related to asset growth and which is aimed at gradually removing discrepancies between the actual and desired capital ratio desired capital ratios vary significantly across credit unions there is little evidence of short run adjustments to the risk of the asset portfolio to achieve a desired capital position

stacking up the ladder a panel data analysis of tanzanian household energy choices energy use statistics in tanzania reflect the country s low level of industrialization and development in 2016 only 16 9 of rural and 65 3 of urban inhabitants in mainland tanzania were connected to some form of electricity we use a nationally representative three wave panel dataset 2008 2013 to contribute to the literature on household energy use decisions in tanzania in the context of the stacking and energy ladder hypotheses we firstly adopt a panel multinomial logit approach to model the determinants of household cooking and lighting fuel choices secondly we focus explicitly on energy stacking behaviour proposing various ways of measuring what is inferred when stacking behaviour is thought of in the context of the energy transition and presenting household level correlates of energy stacking behaviour thirdly since fuel uses have gender differentiated impacts we investigate women s bargaining power in the decision making process of household fuel choices we find that whilst higher household incomes are strongly associated with a transition towards the adoption of more modern fuels especially lighting fuels this transition takes place in a context of significant fuel stacking in tanzania government policy has been aimed mostly at connecting households to the electric grid however the public health environmental and social benefits of access to modern energy sources are likely to be diminished in a context of significant fuel stacking lastly we present evidence that the educational attainment of women in the household is an important aspect of household fuel choices

fuel demand elasticities for energy and environmental policies indian sample survey evidence india has been running large scale interventions in the energy sector over the last decades still there is a dearth of reliable and readily available price and income elasticities of demand to base these on especially for domestic use of traditional fuels this study uses the linear approximate almost ideal demand system la aids using micro data of more than 100 000 households sampled across india the la aids model is expanded by specifying the intercept as a linear function of household characteristics marshallian and hicksian price and expenditure elasticities of demand for four main fuels are estimated for both urban and rural areas by different income groups these can be used to evaluate recent and current energy policies the results can also be used for energy projections and carbon dioxide simulations given different growth rates for different segments of the indian population

activity choice labor allocation and forest use in malawi this article examines the determinants of activity choice affecting forest use among low income households in malawi data from three villages are used to estimate a system of household labor share equations for maize production forest employment and non forest employment a system estimation approach is used to identify factors influencing the competing and synergistic livelihood strategies which households undertake at the forest margin results from constrained maximum likelihood estimation indicate heightened incentives to degrade forests when returns to forest use are high factors reducing forest pressure include favorable returns to non forest employment secondary education of the household head and wealth

household fuelwood demand and supply in nepal s tarai and mid hills choice between cash outlays and labor opportunity abstract subsistence households are a leading source of deforestation and their consumption of fuelwood in particular is important in many developing countries yet the empirical economic examinations of fuelwood consumption are sparse particularly for rural areas where the deforestation occurs and we would argue that forest policy is often designed without a good understanding of the potential responses of subsistence households to the new policy this paper addresses these issues with household evidence from the two major populated regions of nepal market prices labor opportunities the availability of substitutes and measure of access to the basic resource are the most reliable predictive variables for fuelwood consumption and production there are however regional differences and important distinctions between the elasticities of fuelwood collecting or purchasing households with respect to these predictive variables the difference between collecting and purchasing households is notable it recommends forestry policies that target the labor opportunity and the physical resource in regions where collecting households dominate and policies that affect the fuelwood market itself in regions where purchasing households are important a second interesting finding is that fuelwood is relatively scarcer prices are higher in the mid hills and both collecting and purchasing households in this region are beginning to respond to deforestation by using their own land for fuelwood production

a survey of agricultural household models recent findings and policy implications semicommercial farms that produce multiple crops make up a large part of the agricultural sector in developing economies these farms or agricultural households combine two fundamental units of microeconomic analysis the household and the firm traditional economic theory has dealt with these units seperately but in developing economies in which peasant farms dominate their interdependence is of crucial importance researchers have developed models of agricultural households that combine producer and consumer behavior in a theoretically consistent fashion recent empirical applications of these models have extended them and expanded the range of policy issues which can be investigated using this general framework this article reports the results of empirical applications of this model in india indonesia japan the republic of korea malaysia nigeria senegal sierra leone taiwan and thailand it provides a comparative analysis of the policy implications of the approach for such matters as the welfare of farm households the size of marketed surplus the demand for nonagricultural goods and services and for hired labor and the availability of budget revenues and foreign exchange

third world debt and tropical deforestation abstract the deforestation and degradation of tropical forests are taking place at an extremely rapid pace according to the food and agriculture organization fao the estimated annual rate of tropical deforestation during the 1981 1985 period was 113 846 square kilometers or 0 6 of the 1981 total forested area the implications of the loss of these forests are staggering myers n 1989 deforestation rates in tropical forests and their climatic implications friends of the earth london tropical forests are extremely rich ecosystems which support a disproportionately large share of the world s plant and animal species forests play a crucial role in both nutrient and hydrological cycling and may provide sustainable economic benefits through managed harvesting of timber and the collection of non timber products such as fruits nuts and rubber also deforestation is a significant source of global warming through its effects on the global carbon cycle this paper focuses on the relationship between debt and deforestation examining conceptual and empirical arguments that debt is a source of deforestation pressure our study develops a behavioral model which suggests that debt can lead to myopic behavior leading to deforestation rates that may not be optimal in the long run but are necessary in the short run to meet current constraints then country by country data on debt deforestation and other variables are analyzed with regression analysis it is shown that debt is significantly correlated with deforestation under a wide variety of assumptions and specifications our results indicate that debt is an important factor in the deforestation of tropical countries there are certainly other sources of deforestation both micro and macroeconomic which may vary significantly from country to country however we focus on debt because of its dominant role in the economies of developing countries and because of the increased use of debt for nature swaps the link between debt and deforestation that is suggested in this paper implies that debt for nature swaps may have a dual effect on deforestation first the contractual agreement is designed to preserve forests as part of the swap second the reduction in debt may itself reduce the pressure to deforest although this indirect effect is small our research provides evidence that reducing debt reduces deforestation which may be an argument to offer deforesting third world countries some form of debt relief and to utilize more fully debt for nature swaps as a tool for preserving environmental quality

forests fuelwood and livelihoods energy transition patterns in eastern indonesia the central thesis of the energy ladder model is a unidirectional transition from primitive to advance fuel with increased affluence of households although now largely discredited this assumption remains a foundation of laissez faire policies that anticipate energy transition resulting spontaneous forest recovery with economic development our results suggest that such policies can undermine broader policy objectives and actually worsen forest conditions in rural indonesia based on a case study of forest margin communities in eastern indonesia we demonstrate that fuel subsidy reform did little to reduce rural household demand for fuelwood while dramatically increasing fuelwood demand for processing agricultural products our results show how household decisions related to fuel sources are affected by non economic considerations and external factors such as opportunities to sell fuelwood we argue that policy interventions that encourage energy transition of households do not necessarily improve forest conditions as household fuelwood use may be a symptom rather than a driver of deforestation and forest degradation thus policies to improve forest conditions should focus more on addressing the market environment of forest margin communities providing energy alternatives to small industries that are often the larger consumers of fuelwood

combining fair pricing and capital requirements for non life insurance companies the aim of this article is to identify fair equity premium combinations for non life insurers that satisfy solvency capital requirements imposed by regulatory authorities in particular we compare target capital derived using the value at risk concept as planned for solvency ii in the european union with the tail value at risk concept as required by the swiss solvency test the model framework uses merton s jump diffusion process for the market value of liabilities and a geometric brownian motion for the asset process valuation is conducted using option pricing theory in this setting we study the impact of model parameters and corporate taxation on fair pricing solvency capital requirements and shortfall probability for different safety levels measured by the default put option value we show that even though corporate taxes can have a substantial impact on pricing and capital structure they do not affect capital requirements if the safety level is retained before and after taxation

habit formation in consumer preferences evidence from panel data this paper tests for the presence of habit formation using household data a simple model of habit formation implies a condition relating the strength of habits to the evolution of consumption over time when the condition is estimated with food consumption data from the panel study on income dynamics the results yield no evidence of habit formation at the annual frequency this finding is robust to a number of changes in the specification it also holds for several proxies for nondurables and services consumption created by combining psid variables with weights estimated from consumer expenditure survey data

pricing and capital allocation in catastrophe insurance abstract this paper studies multi line pricing and capital allocation by insurance companies when solvency matters to consumers capital is costly to hold and the average loss is uncertain in this environment product quality concerns lead firms to diversify across markets and charge high prices for risk that threatens company solvency even if the risk is unrelated to other asset risk price differences across markets are traced to differences in capital required at the margin to maintain solvency finally the paper shows that capital costs have significant effects on catastrophe insurance markets because of high marginal capital requirements

residential bioenergy heating a study of consumer perceptions of improved woodstoves abstract consumers choices play a key role for the development of biomass heating in the residential sector the city of oslo has granted subsidies to households who change to new improved low emission woodstoves the purpose of this study is to expand the knowledge about users experiences and attitudes to residential biomass heating an adapted model of the theory of planned behavior was used to model households inclination to continue using their woodstoves for heating more than 800 questionnaires were collected from households that recently had invested in an improved woodstove the respondents were satisfied with the new woodstoves the respondents also considered themselves competent to use and maintain the stove and few had problems acquiring fuelwood further analyses showed that the intention to continue to use the new woodstove depends on economic benefits heating performance perceived time and effort to operate the stove environmental effects of heating as well as perceived subjective norm the results imply that when marketing a modern technology for bioenergy heating both public authorities and producers should consider issues related to the users perception of subjective norm such as perceived status of using bioenergy or environmental concerns when designing campaigns to promote the use of woodstoves

the impact of regulation on bank equity infusions abstract this article examines the extent to which regulatory capital standards influence infusions of external equity into commercial banks while such infusions occur infrequently they result in large adjustments to overall bank capital and provide important signals to regulators of managerial intent using a sample of 753 equity capital issues occurring during 1986 and 1987 we find evidence that regulatory minimum capital constraints are instrumental in influencing the financing decisions made by a significant subset of banks

natural resources agriculture and property rights abstract the study explores empirically forest resource and soil quality degradation under different property rights regimes in a subsistence agriculture framework the quantitative analysis is a direct test of the theoretical hypothesis of larson and bromley 1990 larson b bromley d 1990 property rights externalities and resource degradation locating the tragedy journal of development economics 33 2 that common property and private property rights may lead to similar incentives for resource protection a household model is formulated and applied empirically with data from indonesia to test rates of forest biomass and soil quality degradation under private and common property rights results show that the two regimes may equal each other by including bequest value sensitivity analysis is conducted by changing model parameters

modelling of insurers rating determinants an application of machine learning techniques and statistical models abstract in recent years financial regulations such as basel ii and solvency ii have highlighted the utility of credit risk assessments through internal rating systems particularly for estimating the probability of default pd of credit exposures financial entities must provide clear definitions of their internal ratings thus it is possible to associate internal grades to some external rating scale and then to attribute the external pd to the internal grades however this mapping must be based on an extensive comparison of both internal and external rating criteria a substantial body of research has been undertaken of rating determinants for banks and large industrial corporations however the academic literature on insurers rating determinants is very limited and fitness measures have not traditionally been provided this paper proposes a three step model to analyse rating determinants and it is applied to a sample of european insurance firms firstly a feature selection process is performed that mixes statistical bayesian and machine learning approaches from selected features several multivariate models are run both in the statistical field mda logit models and the decision trees research area c4 5 cart their accuracies are compared through bootstrapping strategies and a final model is proposed results show that the feature selection process selects a small group of relevant attributes regarding multivariate models the cart gini oblique decision tree appears to be a good strategy providing a quite satisfactory equilibrium between precision and comprehensibility

habit formation in consumption and its implications for monetary policy models this paper explores a monetary policy model with habit formation for consumers in which consumers utility depends in part on current consumption relative to past consumption the empirical tests developed in the paper show that one can reject the hypothesis of no habit formation with tremendous condence largely because the habit formation model captures the gradual hump shaped response of real spending to various shocks the paper then embeds the habit consumption specication in a monetary policy model and nds that the responses of both spending and inflation to monetary policy actions are signicantly improved by this modication jel d12 e52 e43

low quality or high quality coal household energy choice in rural beijing abstract household low quality coal consumption contributes to severe haze pollution in china in response subsidy policies on high quality coal consumption and the adoption of new type coal stoves have been implemented using survey data in rural beijing this paper characterizes the determinants of coal consumption and switching behavior between low quality and high quality coals to this end we apply bivariate probit regression and tobit regression to evaluate the effectiveness of government policies and the influence of cognitive psychological and socioeconomic factors on coal consumption behaviors our empirical results reveal that prosociality and local environmental concern play crucial roles in household choices and consumption behaviors between two types of coals but global environmental concern does not the promotion of new type coal stoves significantly facilitates the transition from low quality to high quality coal while price subsidies on high quality coal do not influence market acceptance of high quality coal these results demonstrate the importance of cognitive psychological factors and promotion policies on coal consumption behavior overall we suggest that an education campaign or program regarding local environmental awareness prosocial values and behaviors and on new type coal stoves should be further promoted to accelerate the transition from low quality to high quality coal

habit formation in a monetary growth model abstract this paper introduces the hypothesis of habit formation in consumption in the sidrauski am econ rev papers proc 57 1967 534 model a number of results are derived 1 as in the sidrauski model money is superneutral and the friedman rule still provides the optimal quantity of money 2 the demand for money in this model is greater than in the sidrauski model 3 the money demand reflects the habit persistence related to past consumption and the rate of time preference and it is more sensitive to changes in inflation and nominal interest rates than the sidrauski model

can insurers pay for the big one measuring the capacity of the insurance market to respond to catastrophic losses abstract this paper presents a theoretical and empirical analysis of the capacity of the us property liability insurance industry to finance catastrophic property losses in the 100 billion range in our theoretical analysis we show that the sufficient condition for capacity maximization given a level of total resources in the industry is for all insurers to hold a net of reinsurance underwriting portfolio which is perfectly correlated with aggregate industry losses this result leads to a natural definition of industry capacity as the amount of industry resources that are deliverable conditional on an industry loss of a given size estimating capacity using insurer financial statement data we find that the industry could adequately fund a 100 billion event however such an event would cause numerous insolvencies and severely destabilize insurance markets

fuelwood consumption and forest degradation a household model for domestic energy substitution in rural india this paper disusses domestic en ergy supply and demand in rural india links be tween forest scarcity and household fuel collec tion are analyzed in a non separable household model focusing on substitution of non commer cial fuels from the commons and the private do main based on data from villages bordering a protected area a novel maximum entropy ap proach is used for estimation it is found that households respond to forest scarcity and in creased fuelwood collection time by substituting fuels from private sources for forest fuelwood however the magnitude of the response appears insufficient to prevent current fuelwood collection practices from causing serious forest degrada tion jel q24

agricultural expansion and deforestation modelling the impact of population market forces and property rights abstract this paper compares four different modelling approaches to agricultural expansion and deforestation and explores the implications of assumptions about the household objectives the labour market and the property rights regime a major distinction is made between population and market based explanations many of the popular policy prescriptions are based on the population approach assuming subsistence behaviour and limited market integration within a more realistic particularly for the long term effects market approach well intentioned policies such as agricultural intensification programmes may boost deforestation many forest frontier contexts are also characterized by forest clearing giving farmers land rights deforestation becomes an investment to the farmer and a title establishment strategy land titling and credit programmes may therefore increase deforestation

household energy demand in kenya an application of the linear approximate almost ideal demand system la aids abstract this paper estimates price and fuel expenditure elasticities of demand by applying the linear approximate almost ideal demand system la aids to 3665 households sampled across kenya in 2009 the results indicate that motor spirit premium msp automotive gas oil ago and lubricants are price elastic while fuel wood kerosene charcoal liquefied petroleum gas lpg and electricity are price inelastic kerosene is income elastic while fuel wood charcoal lpg electricity msp and ago are income inelastic the results also reveal fuel stack behaviour that is multiple fuel use among the households main policy implications of the results include increasing the penetration of alternative fuels as well as provision of more fiscal incentives to increase usage of cleaner fuels this not withstanding however the household income should be increased beyond a certain point for the household to completely shift and use a new fuel

economies of scale in services a study of multinational insurers this study investigates whether multinational insurers achieve economies of scale using a time series cross sectional design it analyzes the relationship between expenses and output of multinational insurers the study finds that multinational insurers achieve economies of scale only up to a point and rather than benefitting from scale the most internationally diverse insurers suffer diseconomies the conclusion is that the benefits of extensive foreign acquisitions by insurers are questionable

why have improved cook stove initiatives in india failed summary an estimated 2 7 billion people cook meals on biomass fueled brick stone and clay stoves scarcity of wood and negative impacts on health and environment have motivated efforts to design and distribute improved cook stoves in developing countries in india adoption is limited despite massive promotion over many decades existing research suggests that many rural women in india do not want improved stoves and those who do face obstacles to adoption we step back from the many good case studies to examine the broader story of improved cook stoves ics in india we do so by bringing together technical research of applied science and narrative critique of social science rather than assuming a priori that traditional stoves require replacement we ask why indian cook stoves been a magnet for so much attention why adoptions rates have remained low and what lessons might be learned from a broad multi disciplinary perspective our approach is critical and reflexive given our own involvement in ic efforts and puts gender at the center our big picture review shows that the indian chulha for all its problems is a remarkably successful technology which also satisfies several important household needs hence targeting this device for obsolescence has profound implications that cannot be reduced to energy consumption or environmental hazards rural women do not prioritize ics but addressing their priorities requires either capital intensive investment or challenging powerful institutions in contrast ic interventions are relatively cheap decentralized mechanical and seemingly apolitical hence their popularity in development programs our review of chulha research leads us to reject both the optimism of development planners who frame such problems as technical and the antagonistic pessimism of their critics searching for a middle ground requires stepping back from the dogma of efforts to improve biomass cook stoves

price regulation in property liability insurance a contingent claims approach a discrete time option pricing model is used to derive the fair rate of return for the property liability insurance firm the rationale for the use of this model is that the financial claims of shareholders policyholders and tax authorities can be modeled as european options written on the income generated by the insurer s asset portfolio this portfolio consists mostly of traded financial assets and is therefore relatively easy to value by setting the value of the shareholders option equal to the initial surplus an implicit solution for the fair insurance price may be derived unlike previous insurance regulatory models this approach addresses the ruin probability of the insurer as well as nonlinear tax effects

household fuel use in developing countries review of theory and evidence because of recent concerns about the negative externalities of traditional fuel use on the environment and health the issue of the household fuel transition in developing countries from dirty fuels towards clean fuels has received growing research attention this paper provides an up to date survey of the economic literature on household fuel use in these countries first we present the conceptual and theoretical frameworks then we discuss the empirical results that show how a wide range of factors drive the household fuel transition finally we suggest priorities for policy initiatives and highlight areas of future research

investment risk taking by institutional investors according to theory institutional investors face both risk management and risk shifting incentives this article assesses the relevance of these conflicting incentives for dutch pension funds and insurance firms over the period 1995 to 2009 using a unique and extended data set we observe a significant positive relationship between capital and asset risk for insurers indicating that risk management incentives dominate in the dutch insurance industry risk shifting incentives however also seem relevant as stock insurers take more investment risk than their mutual peers for dutch pension funds we conclude that overall neither risk shifting nor risk management incentives seem to dominate interestingly we find that professional group pension funds take significantly less investment risk than other types of pension funds this finding is in line with expectations as in professional group pension funds potential incentive conflicts between pension fund participants and the employer are effectively in

female labor force participation and household dependence on biomass energy evidence from national longitudinal data this research received financial support from the food policy institute at the australian national university

the new economic model and marine fisheries development in latin america the new economic model nem has profoundly influenced fisheries development in latin america facilitating the emergence of new and increasingly influential interest groups within the industry it has also stimulated new forms of production and prompted new legislation to regulate fishing in the region s most important fishing countries these changes have coincided with latin america s increasing importance in world fisheries production and trade the nem has not however resolved the sector s fundamental problems such as overfishing overcapitalization and conflict and has arguably exacerbated them

federal deposit insurance regulatory policy and optimal bank capital this paper seeks to explain the combination of explicit and implicit pricing for deposit insurance employed by the fdic essentially the fdic sells two products insurance and regulation to span the product space it must and does set two prices we argue that the need to establish regulatory disincentives to bank risk taking is the heart of the controversy over the adequacy of bank capital and that the ability to close risky banks before exhausting their charter value i e the value of their right to continue in business stands at the center of these disincentives and in front of the fdic s insurance reserves just as a book shouldn t be judged by its cover a government agency shouldn t be judged by the words behind its initials with the fdic federal deposit insurance corporation the agency s name describes only part of its formal operations the fdic is quasi governmental has a regional structure and sells deposit insurance however the initials fail to convey the fdic s critical place in the governmental regulatory structure as the sole federal overseer of the approximately 8900 state chartered commercial banks that have chosen not to belong the federal reserve system reflecting the federal reserve s membership problem the number of these banks is growing year by year besides selling deposit insurance at bargain explicit rates the fdic performs four regulatory functions 1 entry regulation it passes on new banks applications for deposit insurance and on branch and merger proposals as well thereby protecting the value of existing bank charters 2 examination two thirds of fdic employees are concerned with inspecting bank records and supervising managerial activity 3 regulation of deposit rates and conditions for withdrawal by tradition fdic policies on these matters conform entirely with regulations applicable to federal reserve member banks and 4 disposition of failed banks when an insured bank fails the fdic usually chooses not to liquidate it 2

adverse selection private information and lowballing in insurance markets recent contributions to the adverse selection literature have focused on a multiperiod competitive environment in this setting a clean distinction arises between the predictions of competing models cooper and hayes extend the model of rothschild and stiglitz to multiple periods the result is a self selecting equilibrium characterized by price highballing or systematically overcharging new business kunreuther and pauly suggest that information asymmetries between competing insurance firms render such price quantity policies infeasible their model results in a pooling equilibrium that is characterized by price lowballing or systematically undercharging new business our evidence is consistent with the kunreuther and pauly model and reveals the persistence of adverse selection in the automobile insurance market copyright 1990 by the university of chicago

the determinants of household energy demand in rural beijing can environmentally friendly technologies be effective with the recent rapid economic growth total energy demand in rural china has increased dramatically and the energy structure is in the transition from non commercial to commercial sources simultaneously it is expected that households in rural areas will face energy shortages and additional environmental problems unless they have more access to renewable energy technologies however little is known about i the transition of energy use patterns and ii whether introduced technologies have been effective to analyze these issues we estimated the energy demands of rural households by using survey data taken from beijing s ten suburban districts the data contain information on both non commercial and commercial energy use key characteristics of the households and several renewable energy technologies our empirical analysis yielded three main results first the per capita income is a key factor in the per capita energy consumption more specifically the marginal increase or marginal change in per capita coal consumption strongly diminishes or declines as per capita income increases second coal and liquefied petroleum gas lpg prices do not exhibit substitution effects but an increase in these prices has strong negative effects on the use of these energy resources third renewable energy technologies are identified to reduce coal consumption and to improve energy efficiency overall these findings suggest a positive perspective if the chinese government were to design appropriate policies associated with renewable energy technologies and related energy prices then coal consumption can be reduced in the near future and the substitution to cleaner energy use will accelerate therefore a smooth energy transition in rural china could be made in a more environmentally sustainable manner

poverty and environmental degradation a review and analysis of the nexus abstract there is much controversy surrounding the poverty environmental degradation nexus the predominant school of thought argues that poverty is a major cause of environmental degradation and if policy makers want to address environmental issues then they must first address the poverty problem another school of thought argues that a direct link between poverty and environmental degradation is too simplistic and the nexus is governed by a complex web of factors in this paper a formal structure for analyzing the complex web of factors is formulated and used to review the existing literature on the links between poverty and the degradation of four natural resource sectors the analysis highlights the important role institutional and market failure in encouraging agents from various income groups to exhibit unsustainable activities which in turn forces some of the agents to fall into poverty another important factor is the role of conflicts between different agents income groups in the povertyenvironmental degradation nexus the analysis also highlights the presence of feedback loops between environmental degradation and poverty

the effects of closure policies on bank risk taking abstract this paper models bank closure policy for a risk averse bank that enjoys flat rate deposit insurance we find that increasing the level of net worth at which banks are closed can increase or decrease induced risk aversion as well as increase the likelihood that marginally healthy banks would be subject to extreme moral hazard these result suggest that more timely closure policies should be imposed in conjunction with greater monitoring of bank portfolio risk and with restrictions on risk taking for marginally healthy banks in addition we find that changes in closure policy can increase or decrease desired leverage and that this effect depends on the degree of correlation among asset returns

the transition to a new inflation rate in models with habit formation abstract the money in utility model is re considered to allow for habit forming preferences in which habits develop over instantaneous utility from consumption and real money holdings an increase in the inflation rate does not affect the steady state level of capital or consumption but reduces the steady state levels of real money holdings and habits the model has important off steady state dynamics

household energy mix in uganda abstract this paper presents evidence that household energy use in uganda conforms to the energy ladder theory as household income increases solid and transitional fuel use evolves in an inverse u manner while electricity consumption shows a direct relationship with income public infrastructure provision income and education are the key variables which can be targeted to reduce household dependence on solid fuels while increasing non solid fuel use while education and public infrastructure have varying impacts on rural and urban households energy mix these variables generally reduce rudimentary fuel use and increase modern fuel consumption timely investment in electricity infrastructure is necessary to cater for burgeoning electricity demand as households become affluent strategies for reforestation dissemination of improved cookstoves relieving supply side constraints for modern fuels and staggered payment options to lower the cost of entry for modern fuels can improve ugandan households energy security

capital theory and the measurement of sustainable development an indicator of weak sustainability the measurement of sustainable development is not without considerable difficulties yet this should not detract from the positive advances that can be made in this direction in this paper we present one form that a weak sustainability indicator can take derived from a simple but intuitive savings rule it incorporates the idea that the level of overall capital stock should be non decreasing although subject to qualification at this stage some interesting results emerge from the application of the rule to 18 countries

startup costs and the decision to switch from firewood to gas fuel firewood remains a key source of energy for households in developing countries contributing to forest degradation and deforestation the adoption of alternative fuels may be hindered by high startup costs and this problem may be compounded by restrictions in credit availability we use survey data to examine how credit access affects firewood consumption in guatemala our results suggest that access to credit plays a statistically significant role in determining firewood consumption through its effect on the ability to purchase a gas stove however simulations suggest that these effects are small and that subsidizing stoves would be amore promising policy for reducing firewood consumption

rising wages and energy consumption transition in rural china abstract residential energy consumption in rural china is undergoing a transition from traditional biomass energy to modern commercial energy this paper examines the impact of rising wage rates on energy consumption mix in rural china using a unique panel data set from our two round surveys of 409 rural households in 4 provinces the results show that the wage rate at the village level has a significant negative impact on traditional biomass energy consumption and significant positive effects on consumption of electricity and new renewable energy in rural china as traditional biomass energy is mainly collected with family labor and is relatively labor intensive an increase in rural wage rates would enhance the opportunity costs of traditional biomass energy leading to a reduction in biomass energy consumption continuously rising rural wage rates could accelerate the transition from biomass energy to electricity in rural areas these findings could have important policy implications not only for indoor air quality and environmental and health issues in rural areas but also for greater security in rural energy supply and policies to incentive farmers to better utilize biomass resource after harvest

price cutting in liability insurance markets this article analyzes alleged underpricing of general liability insurance prior to the mid 1980s liability insurance crisis the theoretical analysis considers whether moral hazard and or heterogeneous information for forecasting claim costs can cause some firms to price too low and depress other firms prices cross sectional analysis of insurer loss forecast revisions which should be greater for firms with low prices caused by moral hazard or heterogeneous information and premium growth provides evidence consistent with low pricing due to moral hazard but not heterogeneous information the evidence also implies that shifts in the loss distribution produced large industrywide forecast errors copyright 1994 by university of chicago press

demand side policies for environmental protection and sustainable usage of renewable resources abstract since many renewable resource systems such as tropical and temperate forests coral reefs and wild fisheries are often exploited at unsustainable rates studies aimed at reducing these trends have focused on the market failures associated with over exploitation within this framework the literature devised what we term supply side policies to correct these market failures here we introduce demand side policies into the mix of renewable resource and environmental management policies these policies are designed to increase the demand for goods produced in a sustainable fashion by 1 promoting the long term conservation of natural capital assets 2 promoting the attainment of economic efficiency and 3 providing greater political acceptability relative to supply side policies

the environmental impact of poverty evidence from firewood collection in rural nepal abstract we investigate determinants of household firewood collection in rural nepal using 1995 96 and 2002 3 world bank living standards measurement survey lsms data we incorporate village fixed effects endogenous censoring measurement error in living standards and heterogeneous effects of different household assets we find no evidence in favor of the poverty environment hypothesis the evidence for the environmental kuznets curve depends on the precise measure of living standards and time period studied firewood collections fall with a transition to modern occupations and rise with increasing population and household division the local interhousehold collection externality is negligible indicating that policy interventions are justified only by ecological considerations or nonlocal spillovers

household energy choice and consumption intensity empirical evidence from bhutan abstract this paper uses data from three bhutan living standard surveys blss 2003 blss 2007 and blss 2012 to examine the trends and patterns of household energy consumption and identify and analyze the factors that influence household energy choices consumption intensity and the per capita household expenditure on energy sources in bhutan during the last decade significant numbers of bhutanese households have switched to cleaner energy sources empirical results show that a household s choice of cleaner energy sources is driven by income level and household wealth the age gender and education of the household heads access to electricity and location education and income have a differential role on the choice of clean or dirty fuel wealthier and more educated households use and rely more on clean sources of energy like electricity and liquid petroleum gas while poorer households use and rely on dirty fuel such as fuelwood and kerosene the study shows that female headed households are more likely to choose cleaner fuels and above all the availability of a clean and cost effective source of energy within proximity to the household is an important factor in the adoption of clean energy several models using a variety of alternative independent variables such as proxies for education and wealth were estimated and confirmed the robustness of the results

the economic relevance of sustainable agroforestry practices an empirical analysis from tanzania abstract this paper investigates the economic relevance of sustainable behavior of agroforestry practices for smallholders using the example of firewood exploitation in rural tanzania three questions are addressed 1 to what extent do households behave sustainably regarding firewood extraction from agroforestry 2 which factors determine the likelihood of households practicing sustainable agroforestry 3 are sustainably behaving households better off in terms of income compared to households practicing unsustainable agroforestry the analysis is based on cross sectional data of 314 households a sustainability indicator shows that the share of sustainable households varies between 14 and 41 depending on the underlying wood growth rate the results of the logistic regression indicate that property rights regarding the ownership of agricultural land and environmental awareness increase the likelihood of sustainable firewood extraction empirical evidence from the quantile regression reveals that poorest households generate higher income if they extract firewood unsustainably the opposite is true for households of upper income percentiles thus the poor are likely to increase environmental degradation to generate more income causing a downward spiral of the poverty environment trap resulting in income losses in the long run households with a per capita income of 524 tzs or more manage their tree stocks sustainably

soil erosion and smallholders conservation decisions in the highlands of ethiopia abstract soil erosion is one of the most serious environmental problems in ethiopia coupled with growing populations falling per capita food production and worsening poverty loss of productive land due to land degradation undermines rural livelihoods and national food security despite their awareness of the erosion problem peasants investments in land have been limited we use an applied nonseparable model to simulate conservation decisions pervasive market imperfections poverty and high rates of time preference seem to undermine erosion control investments lack of technologies which provide quick returns to subsistence constrained peasants also seem to deter such investments lower private incentives to internalize the intertemporal land degradation externality may require public intervention

fuelling calorie intake decline household level evidence from rural india summary in india average calorie intake has declined even as real monthly expenditure has increased since cross sectional evidence suggests a positive relationship between the two variables the trend emerges as a major puzzle using household level data from four recent rounds of national sample survey data on consumption expenditure and a novel instrumental variable estimation strategy we find that rising expenditure on non food items is one of the factors that has led to the calorie intake decline we provide causal evidence for such a food budget squeeze in the case of one type of non food item viz expenditures on cooking fuel

effect of fuelwood scarcity and socio economic factors on household bio based energy use and energy substitution in rural ethiopia abstract in ethiopia biomass is predominantly utilized for household energy needs often using inefficient rudimentary stoves which cause adverse environmental and welfare effects this paper examined the contribution of biomass resources to rural household energy use and energy substitution the analysis applied the ordinary least square in the final stage estimation of fuelwood and overall biomass energy consumption by using predicted shadow prices the paper used tobit model to estimate charcoal and agricultural fuel consumption due to the presence of censoring an increase in fuelwood shadow price was associated with reduced household fuelwood consumption with price elasticity of 0 38 the cross price elasticity between fuelwood and agricultural fuels revealed no evidence of energy substitution which conforms to the findings of previous studies household access to electricity was associated with lower household biomass energy utilization but kerosene was not fuelwood substitute household energy use conformed to the fuel stacking or multiple fuel use concept but households preferred modern energy options as welfare increased in areas where modern energy is available this suggests that there is a promising prospect for fuel transition but access to modern energy and economic growth have key roles the findings suggest that a concerted policy effort is required that would help diversify rural livelihoods improve living standards and encourage economic growth encourage inter fuel substitution through improved modern energy access and afforestation to increase biomass supply

a ladder within a ladder understanding the factors influencing a household s domestic use of electricity in four african countries abstract according to the energy ladder hypothesis electricity is at the top of the energy ladder of household energy use that depends primarily on wealth status income and education levels of the users however it is often observed that households with higher income wealth and education levels do not use electricity for all domestic activities such as lighting heating and cooking creating a ladder within a ladder using a comprehensive data set from the living standard measurement study from four african countries ethiopia malawi tanzania and uganda covering 17 000 households this paper investigates the factors determining a household s adoption of electricity for lighting only and for lighting and cooking the results of a multinomial logit model and an ordered probit model show that demographic characteristics a household s wealth and human capital access to markets and remoteness greatly accelerate a household s use of electricity for light and cooking which provides evidence of a ladder within a ladder

the bank capital decision a time series cross section analysis this paper seeks to explain the dramatic decline in capital to asset ratios in u s commercial banks during the last two decades it is hypothesized that the rise in nominal interest rates during this period might have contributed substantially to the fall in capital ratios time series cross section estimation supports the hypothesis regarding the interest rate bank capital is the sum of equity plus debt subordinated to deposits capital provides a cushion that protects the bank from insolvency when the value of its assets falls a bank can meet its obligations to depositors as long as losses on its asset portfolio do not exceed its capital the ratio of capital to total assets in u s commercial banks has fallen dramatically in the last two decades dropping from 11 7 percent in 1961 to 5 7 percent in 1978 the lowest level since world war ijj1 figure 1 shows the decline in the ratio of capital to noncash assets these figures suggest that the federal deposit insurance corporation fdic and uninsured depositors are being exposed to increased probabilities of losses from bank insolvencies however relatively little empirical research has been devoted to the determinants of the bank capital decision further the existing work see for example peltzman 24 mingo 20 or mayne 17 18 uses only cross sectional data and therefore does not necessarily explain the decline in capital to asset ratios over time previous empirical research has also focused on book values rather than market values of debt and equity although market values provide better estimates of the protection afforded by capital this practice might be partly justified by the attention paid to book values by bank regulators however the increasing use of qualitative factors as well as book ratios in capital regulation indicates that regulators are aware of the deficiencies in book values many of the so called qualitative considerations are precisely the factors that distinguish market from book value 6 pp 78 80 finally difficulties arise over the proper measure of capital the empirical studies cited above treat equity and debt capital symmetrically both equity and assistant professor of finance economics boston university school of management this paper was originally written as part of a doctoral dissertation at m i t helpful suggestions from robert mcdonald richard schmalensee larry summers and edward j kane are gratefully acknowledged l these statistics are based on the market values of capital and assets the methods used to construct the market value series are described in the appendix capital asset ratios based on book values also have fallen over the period in question although not as severely

a reexamination of mean variance analysis of bank capital regulation abstract the mean variance framework has been used to analyze the effects of bank capital regulation on the asset and bankruptcy risk of insured utility maximizing banks this literature claims that more stringent capital regulation will increase asset risk and can increase bankruptcy risk these conclusions are notable because they are opposite to those obtained for insured value maximizing banks in this paper we show that the utility maximization literature does not support its conclusions regarding the effects of bank capital regulation because it has mischaracterized the bank s investment opportunity set by neglecting the option value of deposit insurance

energy consumption in rural china a household model for three villages in jiangxi province abstract in china fuelwood and coal are the most important energy sources for rural households in poor areas along with population and economic growth excessive fuelwood collection is a major cause of deforestation burning coal contributes to environmental problems such as air pollution acid rain and greenhouse gas emissions the purpose of this article is to analyze factors determining choice of energy source and labor input into fuelwood collection in poor forest rich regions and to provide policy recommendations on ways to affect these choices to this end a nonseparable household model reflecting choices in labor allocation and energy demand of rural households is estimated from available data for three villages in a poor forest rich region in jiangxi province southeast china innovative aspects of this article are the analyses of factors driving household substitution between forest and non forest fuels and of dissimilarities in household responses under different market access conditions

application of an almost ideal demand system aids to ethiopian rural residential energy use panel data evidence abstract it is well known that poor rural households in low income economies are reliant on traditional fuels to meet basic domestic energy needs but little is known about the specific underlying socio economic drivers of residential fuel choices in ethiopia i used the linear approximation almost ideal demand system laaids with normalized prices to compute expenditure elasticity and a multinomial logit model mlm to examine household fuel use the laaids model result showed that expenditure was elastic for modern fuels but inelastic for traditional fuels regression results from the mlm indicated that fuel choice behaviour of rural households could be more accurately described as fuel stacking behaviour as opposed to the energy ladder hypothesis in rural areas household fuel choice may be constrained by limited access to commercial fuels and efficient cook stoves supply dependency and affordability consumer preferences and a web of other intricate factors rural households had less incentive for fuel switching due to underlying factors and the availability of fuel wood without direct financial cost with continued deforestation and receding forests households are expected to develop inter fuel substitution and switching behaviour conditional on access to modern energy technologies

risk based capital adequacy standards for a sample of 43 major banks abstract the paper extends the option theoretic framework for the estimation of risk adjusted deposit premiums to the calculation of risk based capital adequacy standards based on market data for equity and the book value of debt the model solves for the market value of the capital infusion required to lower the implied deposit premium to acceptable levels of risk this capital infusion can then be translated into market value capital adequacy standards and book value capital asset ratios the determination of which is within the current statutory discretion of regulatory agencies the model is empirically applied to a sample of 43 major u s banks

challenges for economic policy in sustainable management of marine natural resources the sustainable management of marine natural resources presents particular challenges to the managers of those resources while such management has typically been based on biological considerations it is argued that this has resulted in overexploitation and destruction of important marine assets in industries such as fishing and tourism consequently it is concluded that other approaches are needed with the use of economic concepts and management tools particularly relevant at the same time the human welfare outcomes of the application of various policy instruments must be carefully considered while biological information is critical to the formulation and implementation of successful management regimes it is concluded that the application of economic instruments will become more attractive to resource managers with these instruments underpinned by consideration of property rights and an appropriate allocation of economic rents a greater focus on these economic matters will take resource managers further in the direction of sustainable management of increasingly scarce marine resources the conclusions in the paper are supported by various case studies from fisheries and tourism 2001 elsevier science b v all rights reserved

capital and risk in property liability insurance markets abstract this paper investigates the capital and portfolio risk decisions of property liability insurance firms a theoretical model based on option pricing theory is developed which predicts a positive relationship between insurer capital and risk as firms balance these two factors to achieve their desired overall insolvency risk the implications of the model are then tested empirically using a simultaneous equations methodology the results support the predictions of the model they also provide evidence that managerial incentives play a role in determining capital and risk in insurance markets the findings have significant implications for insurance solvency regulation

modeling the choice to switch from fuelwood to electricity implications for giant panda habitat conservation despite its status as a nature reserve wolong nature reserve china has experienced continued loss of giant panda habitat due to human activities such as fuelwood collection electricity though available throughout wolong has not replaced fuelwood as an energy source we used stated preference data obtained from in person interviews to estimate a random utility model of the choice of adopting electricity for cooking and heating willingness to switch to electricity was explained by demographic and electricity factors price voltage and outage frequency in addition to price nonprice factors such as voltage and outage frequency significantly affect the demand thus lowering electricity prices and increasing electricity quality would encourage local residents to switch from fuelwood to electricity and should be considered in the mix of policies to promote conservation of panda habitat 2002 elsevier science b v all rights reserved

capital controls and bank risk abstract we analyze the effects of deposit guarantees on banks loan portfolio in contrast to earlier work we view bank loans net of evaluation and monitoring costs as non zero npv investments e g market securities deposit guarantees lead to inefficient investment and under plausible circumstances capital requirement increases lead banks to increase asset risk the risk increase reduces the beneficial effects of capital increases on the probability of default and on the economic efficiency of bank lending in some cases a tightening of the capital constraint even leads to an increase in the probability of default and financial instability and to higher expected costs of transferring assets to regulatory agencies increases in bank capital are not a substitute for risk monitoring and control and may imply an increased need for such surveillance

capital regulation and bank risk taking a note abstract this paper examines theoretically the effects of more stringent capital regulation on bank asset portfolio risk the analysis shows that for a value maximizing bank incentives to increase asset risk decline as its capital increases thus as long as regulatory efforts to contain asset risk and size are not reduced more stringent capital regulation unambiguously reduces the expected liability of the deposit insurance system

regulation and the determination of bank capital changes a note the effectiveness of bank capital adequacy requirements is examined in this paper using empirical tests similar to those employed by peltzman and mingo no significant relationship is found between changes in bank capital and the capital standards imposed by regulators the findings conflict with those of previous studies the conflict in findings it is argued results from the failure of previous studies to account for the effect of binding deposit rate ceilings this paper reexamines the question of whether bank capital adequacy standards formulated by the regulators have any effect on the capital decisions of commercial banks using a much larger sample of banks and a different time period than previous studies we provide evidence that regulatory capital standards are not in general effective moreover we suggest that the conflicting conclusions reached by previous studies concerning the influence of bank capital standards result from a failure to account for the influence of other bank regulations particularly the effect of deposit interest rate ceilings bank capital serves two purposes it is a source of funding and it is a residual capable of absorbing losses these two functions of capital in banking do not differ qualitatively from the role of capital in a nonfinancial corporation the incentives for equity financing in banking differ from the incentives to use equity in nonfinancial firms primarily because of deposit insurance deposit insurance transfers default risk from depositors to the insurer as currently structured deposit insurance premiums are insensitive to the risk assumed by the insurer the federal deposit insurance corporation fdic a conflict therefore arises between the level of equity desired by bank shareholders and the level desired by the fdic this conflict arises because with complete insurance additional equity reduces the contingent liability of the insurer but does not reduce the cost of deposit financing through adjustments in deposit interest rates or through lower insurance premiums the absence of these benefits causes a conflict between the bank shareholders and the deposit insurer and

anticipation of future consumption a monetary perspective we adapt the monetary model sidrauski 1967 to study the hypothesis of anticipation of future consumption we assume that anticipation of future consumption affects an agent s instantaneous utility and that all effects of future consumption on current well being are captured by the stock of future consumption monetary policy effectiveness is thereby reduced and a zero nominal lower interest rate and thus the friedman rule is destabilizing given this we can derive a just stable equilibrium nominal interest rate with matching definitions for inflation and monetary growth we demonstrate that these implied lower bounds match their historical analogues well

insolvency experience risk based capital and prompt corrective action in property liability insurance abstract this paper analyzes the accuracy of the risk based capital formula for property liability insurers that was adopted in 1993 by the national association of insurance commissioners naic a logit analysis is conducted on a large sample of solvent and insolvent insurers spanning the period 1989 1993 predictive accuracy is very low when the ratio of naic risk based capital to actual capital is the sole indendent variable in the logit analysis but accuracy improves significantly when the components of the formula and variables for firm size and organizational form are used as regressors improvements in the formula are needed to facilitate prompt corrective action and reduce insolvency costs

household energy choices and fuelwood consumption an econometric approach using french data this study proposes an econometric analysis of household fuelwood demand in france the choice concerning the energy used for heating is modeled stressing the combination between one type of energy used as a main source and another one used as a back up this endogenous decision has an impact on fuelwood consumption and is taken into account to avoid biased estimates of price and income elasticities the results show that the choice of energy mix is determined by the income and the socio economic characteristics of households and that fuelwood consumption is price sensitive in the case where wood is the main source of energy

bioenergy and rural development the role of agroforestry in a tanzanian village economy recent papers indicate that decentralized bioenergy crop production offers increased market access and income diversification strategies for the rural population the analyses concentrate on the potential effects of newly discussed crops such as jatropha curcas cassava and sugarcane on macro level thereby two aspects are neglected the income effects on micro level and the integration of traditional firewood production systems for comparison to fill this gap an environmentally extended social accounting matrix esam at the village level is developed and applied to a rural village in tanzania the objective is first to explore the integration of agroforestry systems in rural smallholder systems and second to analyze income effects of agricultural biomass production for bioenergy purposes in comparison to firewood production in order to distinguish the use of firewood from public and private tree resources environmental accounts for changes in tree stocks public and private are included findings indicate the importance of including common firewood production as a reference point the highest income effect for the poorest households derives from agroforestry which households use as a source of firewood and fruits for sale or home consumption followed by j curcas sugarcane and finally cassava agroforestry in general has been also found to substantially release the pressure on public forest reserves

asymmetric information and the new theory of the firm financial constraints and risk behavior this paper summarizes recent developments in the theory of the firm that have arisen in examining the implications of imperfect information it shows that a wide range of these models have similar implications for the likely reaction of firms to external environmental and policy changes two significant implications are 1 that firms behave as if they are risk averse individuals maximizing a utility function of terminal wealth profitability even when the risks involved are unsystematic and 2 in many circumstances because this utility function is likely to be characterized by decreasing absolute risk aversion firms are likely to respond significantly and positively to changes in cash flow and profitability together these two phenomena are able to account for a wide range of firm behaviors that have been empirically observed both formally and informally and that are difficult to explain in terms of the traditional theory of the firm furthermore the responses of such firms to policy interventions are likely to differ significantly from those of neoclassical firms this abstract was borrowed from another version of this item

food versus fuel examining tradeoffs in the allocation of biomass energy sources to domestic and productive uses in ethiopia rural households in ethiopia have limited options to meet their domestic energy needs because they lack access to modern fuels and technologies domestic use of certain fuel sources such as cow dung can hinder agricultural outcomes and productivity this article explores the tradeoffs between domestic and productive uses of biomass energy sources in the nile basin of ethiopia using a nonseparable farm household model where labor allocation to energy collection and farming are analyzed simultaneously we estimate a system of five structural equations using three stage least squares and find that the use of dung as a domestic fuel source has negative implications for the value of harvested crops while use of on farm fuelwood is associated with increased value of agricultural output on farm production of fuelwood appears to increase the value of crop output and provide labor savings by making fuelwood collection more convenient for households policy interventions to support the expansion of agroforestry and increase access to new energy efficient technologies are needed to ensure that agricultural productivity can be both increased and sustained

an energy pricing scheme for the diffusion of decentralized renewable technology investment in developing countries the purpose of this paper is to investigate price support for market penetration of renewable energy in developing nations through a decentralized supply process we integrate the new decentralized energy support renewable premium tariff to analyze impacts of tariff incentives on the diffusion of renewable technology in senegal based on photovoltaic and wind technologies and an assessment of renewable energy resources in senegal an optimization technique is combined with a cash flow analysis to investigate investment decisions in renewable energy sector our findings indicate that this support mechanism could strengthen the sustainable deployment of renewable energy in remote areas of senegal although different payoffs emerged profits associated with a renewable premium tariff are the highest among the set of existing payoffs moreover in analyzing impacts of price incentives on social welfare we show that price tariffing schemes must be strategically scrutinized in order to minimize welfare loss associated with price incentives finally we argue that a sustainable promotion of incentive mechanisms supporting deployment of renewable technology in developing nations should be carried out under reliable institutional structures the additional advantage of the proposed methodology is its ability to integrate different stakeholders producers investors and consumers in the planning process

factors determining household use of clean and renewable energy sources for lighting in sub saharan africa abstract the purpose of the current research is to examine the factors that influence household use of determinants of renewable and clean energy sources used for lighting purposes in africa using the data from the living standard measurement study lsms from three african countries ethiopia tanzania and malawi for this purpose the paper uses multinomial logit and ordered probit econometrics models the descriptive analysis reveals that rural households are dependent largely on kerosene and batteries for lighting their houses while electricity and batteries form a major source of energy for lighting urban households a small fraction of households uses solid fuels and solar as their source of energy for lighting econometric results show that female headed households are likely to adopt clean and renewable sources of energy compared to male headed households wealthier and more educated households are found to use electricity and solar energy for lighting while poorer households tend to use kerosene batteries and solid fuels empirical results indicated that the ethiopian households followed by malawian households are more likely to use clean sources of energy compared to tanzanian households