This paper discusses the determinants of firewood consumption in a poor township in rural northern
China, with a special focus on the relationship between households’ economic wealth and firewood
consumption. We find strong support for the poverty-environment hypothesis since household
economic wealth is a significant and negative determinant of firewood consumption. Firewood can
therefore be considered as an inferior good for the whole population in the rural area under study,
although further evidence shows that at the top of the wealth distribution, there might be a floor effect
in the decreasing firewood consumption. Besides economic wealth, our analysis also shows that the
own-price effect is important in explaining firewood consumption behavior, the price effect gaining
importance with rising incomes. Finally, increasing education is also found to be a key factor in
energy consumption behavior, especially when dealing with energy source switching behavior.