The Impact of Free Distribution of LPG Equipment to Rural Households:
The Case of Ghana’s Rural LPG Promotion Program○Kwame Adjei-Mantey* and Kenji Takeuchi*
1. Introduction
Household air pollution is responsible for over three million deaths annually (WHO, 2016)
with a greater percentage of these in developing countries. Apart from deaths, exposure topollution resulting from the use of solid cooking fuels exposes users not only to the risk ofcontracting respiratory and cardio-vascular diseases (WHO, 2017) but also to other lessobvious health effects such as child stunting when babies are exposed in-utero (Adjei-Manteyand Takeuchi, 2019). Solid cooking fuels continue to remain the leading fuels used by almost
three-quarters of households in Ghana (GSS, 2017) and this remains a challenge in the
country’s quest to reduce household air pollution.
One of the measures taken by Ghana’s ministry of energy to promote the use of modern
cooking fuels is the roll out of a policy named Rural Liquified Petroleum Gas Promotion
Program (RLPGPP). This policy aims to accelerate the uptake of LPG and make it the firstchoice domestic cooking fuel in rural communities. Under this policy, rural households areprovided with filled LPG cylinders and cookstoves with corresponding accessories free ofcharge. This is to help make it easier for beneficiary households to make the decision to switchfrom using traditional and dirty cooking fuels to a cleaner and healthier fuel, in this case, LPG.
By the end of year 2017, the ministry had distributed a total of 149,500 cylinders and 118,360
cookstoves with accessories including gas regulators and gas tubes to districts across thecountry. As part of this policy, the ministry also aimed to facilitate the setting up of mini refill
outlets in every beneficiary district in collaboration with LPG marketing companies to makecylinder refill options available to beneficiaries.
After four years of implementing this program, it remains to be seen whether generally, thetargets of this policy have been achieved. The aim of this study is to assess the impact of theRLPGPP on household cooking fuel usage by using two rounds of a national survey onhousehold living standards. Although there are several studies that explore the impact of LPG
distribution in developing countries, evaluation of the policy at the nation-wide level is still
scarce. In addition, this study investigates if any unintended impacts have resulted from theprogram; in this study, we focus on the potential impacts of the program on poverty alleviationin rural households.

2. Data and Method
This study uses the two most recent rounds of the Ghana Living Standards Survey (GLSS6&7). These are independent cross-sectional nationwide surveys which collect household dataon similar variables at different times. From these datasets, we construct district level data.
*Graduate School of Economics, Kobe University

We assign each district a unique code for both time periods and compute district averages forthe variables of interest for households within each district. We do this for both rounds of thedata to arrive at baseline and end-line level data. At the district level, the proportion ofhouseholds in a district that use LPG as their primary cooking fuel is used as a response variable
to judge the impact of the RLPGPP since that is the main goal of the program – to increase
LPG usage among households especially those in rural areas. We also examine the impacts ofthe program on the proportion of households within a district who live in poverty and in
extreme poverty determined by upper and lower poverty lines.
Due to potential endogeneity, we first use the instrumental variable approach to address thepotential endogeneity and appropriately measure the impacts. We use the difference in votes
obtained by the two biggest political parties as a share of total valid votes in the most recent
national elections prior to the program implementation as our instrument. Because this turned
out to be a weak instrument and to avoid the biases of using the two stage least squares in thepresence of weak instruments, we use the limited information maximum likelihood estimation.
The difficulty in finding a stronger instrument necessitated the use of matching methods anddifference in differences after matching. In this approach, we matched beneficiary districts withdistricts that had not benefited from the RLPGPP based on pre-treatment characteristics andmeasured the impacts. To reduce any remaining biases and to make results more robust, weapplied the difference in differences estimation after matching treated and control units tomeasure the impacts of the program.

3. Results
The instrumental variable approach finds no statistically significant impacts of the program;
LPG use has not increased significantly as a result of the program neither has firewood use
reduced any significantly. Consequently, the program had yielded no significant reductions in
the proportion of households that live in poverty and extreme poverty in rural districts. Resultsfrom the matching methods also confirm that the impact of the program on LPG and firewood
use is not statistically significant. On the other hand, the difference in differences estimation
post matching show significant impacts on poverty. The proportion of households below thepoverty lines have reduced significantly attributable to the program. Further investigations
reveal that increases in new constructions of LPG refill stations could be a potential channel
through which the program has impacted on the poverty situations within the districts.

4. Conclusions
Based on all our estimation results, we conclude that implemented in isolation, the program
did not have the strong impact in respect of its primary objective of increasing LPG usage aswell as any impacts on poverty. However, when implemented in conjunction with other factors
such as having the right amount of infrastructure and a sufficient refill plan in place, theprogram has the potential to yield significant impacts.