Using the Nepal Living Standard Survey (NLSS) data, this article identifies the determinants of household's choice of energy for the purpose of cooking and verifies the energy ladder hypothesis (ELH). A multinomial logit model (MNL) is applied to fulfil this objective. It has been found that cleaner energy is more likely to be used in households where the head of the family has a higher level of education and a higher level of income, whereas larger households and households with higher proportion of dependent members, older person or female as head of the family and rural households are less likely to use cleaner energy. Households located in a place far from markets also do not choose cleaner energy. Further, the likelihood of using cleaner energy in the mountain and Terai regions is less than that in the hilly region. This article applies an ordered logit to the same set of data and confirms the robustness of the results. Suitable policy measures have been suggested to enable a transition towards cleaner sources of energy instead of inferior sources in Nepal.

The paper identifies the determinants of energy choice for lighting in Nepal by applying a multinomial logit regression to a nationally representative set of household level data. It has been found that the richer households use better quality source of energy, confirming the energy ladder hypothesis. The other significant determinants of energy choice for lighting in Nepal are: gender and education level of the heads of households, family size and proportion of dependent population in families, distance from the market and location of households. The paper suggests the utilisation of the potential of micro hydropower plants for supplying clean energy in the remote areas of Nepal.