Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/180184 
Year of Publication: 
2017
Series/Report no.: 
ZEF Discussion Papers on Development Policy No. 235
Publisher: 
University of Bonn, Center for Development Research (ZEF), Bonn
Abstract: 
Free distribution of a technology can be an effective development policy instrument if its adoption is socially inefficient and hampered by affordability constraints. Improved cookstoves may be such a case: they generate high environmental and public health returns, but adoption is generally low. Based on a randomized controlled trial in rural Senegal, this paper studies whether one-time free cookstove distribution affects households' willingness to pay (WTP) in the long run. Effects might be negative because people anchor their WTP on the earlier zero price (reference dependence) or positive because information deficits about potential benefits are overcome. We find that households who received a free stove six years back exhibit a higher WTP today compared to control households. Potential reference dependence effects are thus at least compensated by learning effects. Our findings suggest that one-time free distribution does not spoil future prices and might even be a stepping stone for future market establishment.
Subjects: 
technology adoption
cookstoves
willingness to pay
real-purchase offer
energy access
JEL: 
D03
D12
O12
O13
Q41
Document Type: 
Working Paper

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