Farm Input Subsidies and Energy Poverty: Evidence From Malawi

ABSTRACT Farm input subsidies in sub‐Saharan Africa are widely recognised for their role in reducing income poverty by improving household incomes. However, their spillover effects to non income‐based poverty receives comparatively less attention, despite the potential. Using data from the 2020 Multiple Indicator Cluster Survey, this paper investigates the effects of Malawi's farm input subsidy programme on energy poverty. To address potential endogeneity in the selection process for subsidy participation, political clientelism is used as an instrumental variable. The analysis reveals that programme participation reduces energy poverty by 20.4 percentage points. This result is robust across various definitions of energy poverty and is further supported by the Lewbel technique, an alternative quasi‐experimental method. The study identifies increased household wealth among beneficiaries as a key mechanism driving the reduction in energy poverty. These findings suggest that expanding access to input subsidies could be a valuable policy tool for simultaneously addressing both income and non‐income poverty in Malawi and similar contexts.