Migration and Fuel Use in Rural Mexico Dale T. Manning UC-Davis USAEE/IAEE North American Conference July 2013

Health  Biomass fuel causes bronchitis and other lung diseases, heart disease, premature death—US EPA Environmental impacts  Forest depletion, erosion, loss of habitat/biodiversity  National parks less effective if people depend park’s resources Climate change  Wood: 0.39 kg CO2 per kWh  Coal: 0.37 kg CO2 per kWh  Kerosene: 0.26 kg CO2 per kWh Quality of life  Time-consuming activity, TOC Why care about fuel use? olbox.com/co2-emission- fuels-d_1085.html

2 theories of fuel choice Fuel ladder Fuel stacking

Main contributions 1. Present theoretical model of fuel choice 2. Use model to show how migration changes fuel-choice incentives 3. Show empirical impact of out-migration on household fuel use

Research question How does rural out-migration affect fuel choice in rural Mexico? Important because rural- urban migration is a part of development process!

Theoretical framework Household producer  Home-cooked food  Agriculture Given capital  Woodstove, gas stove Chooses inputs  Labor/leisure  ENERGY SOURCE—Firewood or gas?

Theoretical framework Non-separable model  Imperfect labor markets  Non-marketed resource, home-cooked food Household makes consumption and labor allocation decisions simultaneously Energy inputs chosen to minimized cost of meeting energy needs required for optimized consumption  Cost of gas: market price  Cost of firewood: value of time

Migration and labor allocation Ag labor $ Firewood Collection LtoLto

Migration and labor allocation Ag labor $ Firewood Collection LtoLto VMP in Ag (market price) VMP in resource collection (non-market)

Migration and labor allocation Ag labor $ Firewood Collection LtoLto VMP in Ag (market price) VMP in resource collection (non-market)

Migration and labor allocation Ag labor $ Firewood Collection LtoLto VMP in Ag (market price) VMP in resource collection (non-market)

Migration and labor allocation Ag labor $ Firewood Collection LtoLto What happens when a migrant goes to the US?

Migration and labor allocation Ag labor $ Firewood Collection LtmLtm 1. Less total time available

Migration and labor allocation Ag labor $ Firewood Collection LtmLtm 2. Demand for firewood can change

Migration and labor allocation Ag labor $ Firewood Collection LtmLtm Theoretically ambiguous net impact (will likely decrease)

Theoretically ambiguous Investigate empirically Rural Mexico  National Household Survey of Rural Mexico  Representative of rural Mexico  80 communities, 14 states, 5 regions  1543 households

Rural Population of Mexico l-population-percent-of-total-population-wb- data.html 2010 rural population: 25,179,916

As a percentage of total l-population-percent-of-total-population-wb- data.html

Econometric estimation

Results

Results

Results Without a migrant, spend about 3 times as many person-days per year collecting firewood! Average is ~121 days

Results

Results

Results Approximately double gas expenditure!

Results

Results

Results Increase probability of having a gas stove by ~33%! Impact on gas expenditure larger when controlling for selection (Heckman)

Results

Results

Results summary Households with US migrant spend less time collecting firewood Spend more on gas More likely to have a gas stove But they don’t stop collecting firewood

Implications for policy Gas stove investment can be an obstacle Households will use gas if it is cheaper  Can lower price of gas (e.g., improve delivery)  Increase perceived cost of firewood (health effects)  Increase opportunity cost of time Households may add gas into fuel mix without switching completely Beware of firewood markets  Especially if common-property resource  Conventional management may become easier

Thanks!

Background Fuel use/firewood collection connected to other sectors  Agriculture  Labor market development Proposed theories:  Fuel ladder  Fuel stacking

Data National Household Survey of Rural Mexico  PRECESAM, Rural Economies of the Americas and Pacific Rim (REAP) 2002, 2007 Representative of rural Mexico— populations from 500 to 2499 people 80 communities, 14 states, 5 regions 1543 households, 10 states in 2010

Household economy