One-off subsidies and long-run adoption: Experimental evidence on improved cooking stoves in Senegal

Gunther Bensch and Jörg Peters

No 685, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Free distribution of a technology can be an effective development policy instrument if its adoption is socially inefficient and hampered by affordability constraints. Improved cookstoves may be such a case: they generate high environmental and public health returns, but adoption is generally low. Based on a randomized controlled trial in rural Senegal, this paper studies whether one-time free cookstove distribution affects households' willingness to pay (WTP) in the long run. Effects might be negative because people anchor their WTP on the earlier zero price (reference dependence) or positive because information deficits about potential benefits are overcome. We find that households who received a free stove six years back exhibit a higher WTP today compared to control households. Potential reference dependence effects are thus at least compensated by learning effects. Our findings suggest that one-time free distribution does not spoil future prices and might even be a stepping stone for future market establishment.

Keywords: Technology adoption; cookstoves; willingness to pay; real-purchase offer; energy access (search for similar items in EconPapers)
JEL-codes: D03 D12 O12 O13 Q41 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-dcm, nep-dev, nep-ene and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://www.econstor.eu/bitstream/10419/156759/1/884046095.pdf (application/pdf)

Related works:
Journal Article: One‐Off Subsidies and Long‐Run Adoption—Experimental Evidence on Improved Cooking Stoves in Senegal (2020)
Working Paper: One-off subsidies and long-run adoption – Experimental evidence on improved cooking stoves in Senegal (2019)
Working Paper: One-off subsidies and long-run adoption – Experimental evidence on improved cooking stoves in Senegal (2017)
Working Paper: One-Off Subsidies and Long-Run Adoption: Experimental Evidence on Improved Cooking Stoves in Senegal (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:685

DOI: 10.4419/86788795

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