Subsidies, Information, and Energy-Efficient Cookstove Adoption: A Randomized Uncontrolled Trial in Rural Ethiopia
Energy-efficient biomass cookstoves (EEBC) are an important technology for the three billion people relying on firewood and charcoal for cooking in the Global South. This paper assesses the price-responsiveness of demand for EEBC and the role of information about health and economic benefits. The pilot program under evaluation randomized different subsidy schemes (40%, 70%, and 100% subsidy) and information treatments across 292 Ethiopian villages. Unlike previous willingness-to-pay studies we examine a take-it-orleave-it approach in an uncontrolled and hence natural setting. We observe that EEBC demand is highly price-sensitive: There is virtually no EEBC uptake in the no-subsidy group, irrespective of which information households received. Yet, uptake increases considerably for households who received a high subsidy (70% or a 100%). Adding information on economic benefits nearly doubles uptake when coupled with such high subsidies. Our results confirm the emerging picture in the literature suggesting that subsidization for EEBC is required to foster widespread adoption.