Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/162186
Authors: 
Grimm, Michael
Lenz, Luciane
Peters, Jörg
Sievert, Maximiliane
Year of Publication: 
2017
Series/Report no.: 
ZEF-Discussion Papers on Development Policy 232
Abstract: 
Providing electricity to the unconnected 1.1 billion people in developing countries is one of the top political priorities of the international community, yet the costs of reaching this objective are very high. The present paper examines whether the objective and the associated costs are justified by the value that target beneficiaries assign to electricity. We provide experimental evidence on the revealed willingness-to-pay (WTP) for three types of off-grid solar electricity devices. Our findings show that households are willing to dedicate a substantial part of their expenditures to electricity. In absolute terms, though, the WTP does not suffice to reach cost-covering prices. Different payment schemes, which we randomized across our sample, do not alter the WTP significantly. If universal electricity access is to be achieved, direct subsidies might be necessary. We argue that from a public policy perspective it is more rationale to promote off-grid solar than grid-based electrification because of its better cost-benefit performance.
Subjects: 
technology adoption
electrification
willingness-to-pay
real-purchase offer game
energy access
JEL: 
D12
O12
O13
Q28
Q41
Document Type: 
Working Paper

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