Alleviating Multidimensional Energy Poverty and Energy Unaffordability in Rural Areas: The Role of Renting-Out Land

Abstract Renting-out land allows rural farmers to receive rent and reallocate household labor from farm work to more rewarding off-farm activities, leading to income generation and potentially reducing rural energy poverty. However, sparse literature focuses on investigating this association. This study addresses the gap by exploring four waves (2011, 2013, 2015, and 2018) of data collected by the China Health and Retirement Longitudinal Study. We use two dichotomous variables, multidimensional energy poverty (MEP) and energy unaffordability, to capture energy poverty and consider a dichotomous variable representing whether farmers rent out their land as the key explanatory variable. The recursive bivariate probit model estimates the impact of renting-out land on energy poverty. We also investigate the association between renting-out land size and rural energy poverty. The conditional mixed process model captures the left-censored nature of renting-out land size, addresses its endogeneity issues, and regresses its impacts on MEP and energy unaffordability. Our results show that promoting farmers’ renting-out land and enlarging the renting-out land size are promising strategies to alleviate rural energy poverty. In particular, renting-out land significantly decreases the odds of being MEP and energy unaffordability by 12.6% and 22.0%, respectively. In addition, one more unit of land (i.e. mu) rented out can reduce the incidence of MEP and energy unaffordability by 17.3% and 15.3%, respectively. Our findings inspire stakeholders to realize their pursuit of rural energy poverty reduction. Political instruments should be manifested as promoting the adoption and the scale of renting-out land.