Migration and fuel use in rural Mexico

- Theoretical model results show that household energy use in developing countries depends on energy prices and the value of time.
- Modern fuels (e.g., LPG) have market prices while traditional fuels require time to collect.
- Households collect their own firewood and consume home-cooked food; both firewood and home-cooked food have household-specific shadow prices.
- Firewood collection is time-consuming in rural Mexico, requiring 120 person days on average; over 70% of households include LPG in their fuel mix.
- Households with migrants in the United States spend fewer days collecting firewood and more money on LPG purchases.

Many households in developing countries rely on renewable natural resources as their main source of energy. Collecting and burning firewood requires a considerable amount of time, has negative health consequences, and can cause deforestation and depletion of local resources if forests are not properly managed. A transition from traditional to modern fuels can benefit households by reducing these negative effects. Migration, a quintessential feature of development, may facilitate this transition, but its impacts on fuel choice are theoretically ambiguous. It can reduce the household labor available for firewood collection and provide cash to purchase substitutes; however, it has an income effect that changes the demand for home-cooked food and energy to cook it. Firewood or gas could be used to meet the increase in energy demand. To resolve this theoretical ambiguity, we use an instrumental-variables method with household panel data from rural Mexico and investigate the impact of Mexico-to-US migration and remittances on gas expenditures and household labor allocated to firewood collection. Sending a migrant to the United States causes a significant decrease in reliance on firewood collection and an increase in both stove and gas purchases. These findings have potentially far-reaching environmental implications as labor moves off the farm.