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The use of polluting fuels for cooking poses a major health burden on members of poor households in developing countries. The dependence of biomass is both a cause and consequence of poverty. Reliance on this dirty fuel for cooking can compromise health thereby hold back economic development creating vicious circle of poverty. Traditionally women take the responsibility of cooking and often they carry children on back close to warm hearth, exposed to vulnerable and hazardous pollutants. Since firewood is obtained from various sources, each source implies varied influence on the quantity and quality of fuel used. The use of different types of biomass result in different levels of indoor air pollutants causes severe health problems such as Acute Respiratory Infections, lung disease, tuberculosis, asthma, blindness and adverse pregnancy outcomes. The present paper tries to assess the influence of the supply source of fuel woods on the fuel consumption pattern of selected households. The probability of household members affected severely by indoor air pollution will be examined. The cost of illness of households due to indoor air pollution will be analysed with the help of various socio-economic, locational and housing characteristics. The objective assessment of the damages incurred to the households using fuel wood by adopting cost of illness approach will be attempted.