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In many rural areas of low-income countries, biomass fuel is the principal source of household energy, meaning that indoor air pollution (IAP) is a serious health problem. If exposure to IAP is greatest in areas where combustion occurs, primarily the kitchen, IAP will mostly affect the women who cook and the children whom they supervise. Using a 2000-2003 survey of 1638 rural households in Bangladesh, where biomass fuel provides more than 90 percent of household energy, we investigate (i) the extent to which the division of household responsibilities, household structure, and dimensions and location of kitchen facilities causally affect the health of women and children, taking into account optimizing behavior within households, and (ii) whether households act as if they are optimally sharing the burden of a disease. The results suggest that proximity to stoves adversely affects the respiratory health of women and the young children they supervise and that households appear to be aware of and attempt to mitigate the health effects of cooking with biomass fuels in their time allocation decisions, including effects on young children, such that women with lower endowed health have greater exposure to smoke and women with very young children have less exposure to pollutants. We also find, however, that due to measurement error, conventional estimates of the impact of smoke inhalation are underestimated substantially. Finally, our results suggest that improving ventilation by increasing the permeability of roofs or walls has no significant effect on health, consistent with prior studies examining point-source pollutants and health data.