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One-Off Subsidies and Long-Run Adoption: Experimental Evidence on Improved Cooking Stoves in Senegal

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  • Bensch, Gunther
  • Peters, Jörg
Abstract
Free technology distribution can be an effective development policy instrument if adoption is socially inefficient and hampered by affordability constraints. Yet, policy makers often oppose free distribution, arguing that reference dependence spoils the willingness to pay and thus market potentials in the long run. For improved cookstoves, this paper studies the willingness to pay six years after a randomized one-time free distribution. Using a real-purchase offer procedure, we find that households who received a free stove in the past do not reveal a lower willingness to pay to repurchase the stove. Furthermore, we provide exploratory evidence that learning and reference-dependence effects do not spill over from the treatment to the control group. The policy implication is that one-time free distribution does not disturb future market establishment and might even facilitate it.

Suggested Citation

  • Bensch, Gunther & Peters, Jörg, 2017. "One-Off Subsidies and Long-Run Adoption: Experimental Evidence on Improved Cooking Stoves in Senegal," EfD Discussion Paper 17-17, Environment for Development, University of Gothenburg.
    • Handle: RePEc:hhs:gunefd:2017_017
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    More about this item

    Keywords

    technology adoption; cookstoves; willingness to pay; real-purchase offer; energy access;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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