Objectives – We examined the effect of world oil price fluctuations on household fuel use and child respiratory health in Guatemala.

Methods – We regressed measures of household fuel use and child respiratory health on the average world oil price and a rich set of covariates. We leveraged variation in oil prices over the six month period of the survey to identify the association between the fuel prices, fuel choice, and child respiratory outcomes.

Results – A $1 (3.4 percentage point) increase in world fuel prices was associated with a 2.8 percentage point decrease in liquid propane gasoline (LPG) use (p<0.05), a 0.75 percentage point increase in wood use (p<0.05), and a 1.5 percentage point increase in the likelihood of the child reporting a respiratory symptom (p<0.10). The association between oil prices and the fuel choice indicators was largest for households in the middle of the income distribution.

Conclusions - These results indicate that fluctuations in world fuel prices affected household fuel use and, consequently, child health. Policies to help households tide over fuel price shocks and/or reduce pollution from biomass sources would confer positive health benefits. Such policies would be most effective if they benefitted both poor and middle-income households.