Credit, Attention, and Externalities in the Adoption of Energy Efficient Technologies by Low-Income Households

Susanna Berkouwer and Joshua Dean

American Economic Review, 2022, vol. 112, issue 10, 3291-3330

Abstract: We study an energy efficient charcoal cookstove in an experiment with 1,000 households in Nairobi. We estimate a 39 percent reduction in charcoal spending, which matches engineering estimates, generating a 295 percent annual return. Despite fuel savings of $237 over the stove's two-year lifespan—and $295 in emissions reductions—households are only willing to pay $12. Drawing attention to energy savings does not increase demand. However, a loan more than doubles willingness to pay: credit constraints prevent adoption of privately optimal technologies. Energy efficient technologies could drive sustainable development by slowing greenhouse emissions while saving households money.

JEL-codes: D12 D91 G51 O12 O13 O32 Q54 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/aer.20210766 (application/pdf)
https://doi.org/10.3886/E166661V1 (text/html)
https://www.aeaweb.org/doi/10.1257/aer.20210766.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/aer.20210766.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:112:y:2022:i:10:p:3291-3330

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/aer.20210766

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().