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The Effect of Marketing Messages, Liquidity Constraints, and Household Bargaining on Willingness to Pay for a Nontraditional Cook-stove

  • Author(s): Beltramo, Theresa
  • Levine, David I
  • Blalock, Garrick
  • et al.
Abstract

Lack  of  product  information,  liquidity constraints,  and  women’s  limited intrahousehold bargaining power can all slow adoption of new technologies that primarily benefit women and children in poor nations. One such technology, an improved cookstove, can replace inefficient traditional biomass cookstoves that cause significant environmental degradation and some four millions deaths a year. This experiment conducted in rural Uganda estimates willingness to pay for cookstove technologies using Vickrey second-price auctions. Using a randomized controlled trial we first test whether marketing messages which address specific information barriers increase willingness to pay. Second, a within- subjects comparison tests the effect of time payments on willingness to pay. To assess intrahousehold decision-making a correlational study examines the effect of being female, indicators of intra-household decision making, and earning a stable income on willingness to pay. Information campaigns have no large effect on willingness to pay. Neither marketing message- ‘the stove can improve health’ or ‘the stove can save time and money’- consistently increased willingness to pay. We find evidence that consumers in rural Uganda are liquidity constrained. Including time payments raised willingness to pay for a nontraditional cookstove by 41%. Each additional asset owned increased willingness to pay by 10%. Having a stable income increased willingness to pay by 8-10% for both men and women participants, though no effect on willingness to pay is observed of having a stable income for married women. There is a large negative effect on willingness to pay if participant is female- on average men are willing to pay 21-23% more than women. Efforts to increase willingness to pay for nontraditional cookstoves which improve health and abate environmental harm may be more successful by designing and disseminating nontraditional cookstoves with features valued more highly by men and addressing liquidity constraints, instead of repeating marketing messages related to the cookstoves’ health and private economic benefits.

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