The Effect of Information and Subsidy Measures on Adoption of Solar Lanterns: An Application of the BDM Bidding Mechanism in Rural Ethiopia

Alemu Mekonnen, Sied Hassen, Marcela Jaime, Michael Toman () and Xiao-Bing Zhang

No 9595, Policy Research Working Paper Series from The World Bank

Abstract: Solar lanterns are a relatively inexpensive renewable-energy option for household lighting in developing countries. However, the transition to these lighting sources is slow. To understand why, this study uses the Becker-Degroot-Marschak bidding mechanism in a randomized field experiment to investigate the effect of information provision and subsidy policy instruments on the uptake of solar lanterns. Subjects’ willingness to pay tends to be low enough that most of them would purchase the solar lantern only if it is subsidized. Households with access to grid electricity have a lower willingness to pay and are less likely to adopt, while those using kerosene as a source of lighting are more likely to adopt. Access to credit also increases willingness to pay. Information treatments have limited impact: provision of different types of information about the private and public benefits of solar lantern use increases adoption only when it is combined with a high level of subsidies. Given the relatively low cost of solar lanterns, the results suggest that achieving universal electricity access under the United Nations’ Sustainable Development Goals by any means will require subsidizing access.

Keywords: Energy and Mining; Energy and Environment; Energy Demand; Energy Technology&Transmission; Energy Policies&Economics; Renewable Energy; Rural and Renewable Energy (search for similar items in EconPapers)
Date: 2021-03-23
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env and nep-exp
References: Add references at CitEc
Citations:

Downloads: (external link)
http://documents.worldbank.org/curated/en/88618161 ... n-Rural-Ethiopia.pdf (application/pdf)

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:wbk:wbrwps:9595

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().