The effect of marketing messages and payment over time on willingness to pay for fuel-efficient cookstoves. Journal of Economic Behavior & Organization, June 2015.
Authors: Theresa Beltramo, Garrick Blalock, David I. Levine, Andrew M. Simons
Highlights
• We estimate willingness to pay for cookstove technologies using Vickrey second-price auctions.
• Vickrey second price auction experiments have poor predictive validity of actual purchase behavior.
• There is no consistent evidence that information on product attributes improved willingness to pay.
• Adding time payments significantly increases willingness to pay.
• Being female has large negative effects on willingness to pay.
Smoke from inefficient biomass cookstoves contributes to global climate change and kills approximately four million people per year. Cooking technologies, such as manufactured fuel-efficient cookstoves, that mitigate the negative effects of traditional cookstoves exist, but adoption rates are low. The international development community debates whether this low adoption of fuel-efficient cookstoves is due to a lack of adequate product information or due to household financial constraints. We ran Vickery second-price auctions in rural Uganda to elicit willingness to pay for fuel-efficient cookstoves, comparing the effect of informational marketing messages and time payments on willingness to pay. A randomized trial tested the following marketing messages: “This stove can improve health,” “This stove can save time and money,” and both messages combined. None of the messages consistently increased willingness to pay. In a second experiment we compared willingness to pay for two different contracts, one with payment due within a week and one with equal installment payments over 4 weeks. Consistent with household financial constraints, time payments raised willingness to pay by 40%.
