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

Gunther Bensch and Jörg Peters ()

MPRA Paper from University Library of Munich, Germany

Abstract: Free technology distribution can be an effective development policy instrument if market-driven adoption is socially inefficient and hampered by affordability constraints. Yet, policy makers often oppose free distribution, arguing that reference dependence lowers the willingness to pay (WTP) and thus market potentials in the long run. For improved cookstoves, this paper studies the WTP six years after a randomized one-time free distribution in 2009. We demonstrate that the cookstoves were intensely used by the treatment group households in the years after randomization until they reached their designated lifetime. Using a real-purchase offer, we find that both treatment and control households reveal a remarkably high WTP in 2015. The estimated confidence interval suggests that we can exclude a substantial negative effect on the treatment group. The policy implication is that one-time free distribution does not necessarily undermine future market establishment and thus can be an effective policy instrument if rapid dissemination is the objective.

Keywords: energy access; real-purchase offer; reference dependence; supply chains; technology adoption; willingness to pay (search for similar items in EconPapers)
JEL-codes: D03 D12 O12 O13 Q41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm, nep-dev, nep-ene and nep-exp
Date: 2019-03, Revised 2019-03
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Related works:
Working Paper: One-off subsidies and long-run adoption – Experimental evidence on improved cooking stoves in Senegal (2017) Downloads
Working Paper: One-off subsidies and long-run adoption: Experimental evidence on improved cooking stoves in Senegal (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:94211

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