Distribution of government residential utility stimulus in Ghana: evidence from the COVID-19 intervention

Benjamin Amoah and Anthony Amoah

Cogent Economics & Finance, 2024, vol. 12, issue 1, 2331012

Abstract: In the wake of the COVID-19 pandemic, several countries resorted to various levels of lockdown as a panacea for the rampant spread of the virus. However, the imposed lockdown was not without economic challenges, particularly for the poor in developing countries. In response, the government of Ghana unveiled several free social support packages such as free water and electricity services. This study models the behaviour for or against free utility services and further investigates the drivers that explain an individual’s behaviour. Using a survey method and an ordered probit econometric technique, we find evidence that about 71 percent of respondents support free utility services, 14 percent are indifferent, and 15 percent also indicate their disapproval. Furthermore, an ordered probit regression analysis is used to show evidence that educated respondents with higher incomes are less likely to appreciate government-sponsored freebies. Other drivers of such behavioural differences for aggregated and disaggregated free social intervention utility services were further examined.This study examined the reception of free water and a 50 percent electricity discount provided by the Ghanaian government during the COVID-19 pandemic. Utilising survey data and employing an ordered probit method, the research aimed to understand the factors influencing support or opposition towards free utility services. The findings reveal that approximately 71 percent of respondents preferred free utilities, while around 29 percent did not support the Ghana Residential Utility Stimulus implemented by the government. Among those opposed to the residential utility stimulus, a significant proportion were found to be educated individuals with higher incomes, as indicated by the ordered probit regression results. It is suggested that during emergencies like the COVID-19 pandemic, social assistance should be directed towards the impoverished and vulnerable segments of society.

Date: 2024
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DOI: 10.1080/23322039.2024.2331012

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