Free technology distribution can be an effective development policy instrument if adoption is socially inefficient and hampered by affordability constraints. Yet, policy makers often oppose free distribution, arguing that reference dependence spoils the willingness to pay and thus market potentials in the long run. For improved cookstoves, this paper studies the willingness to pay six years after a randomized one-time free distribution.

The cost of providing electricity to the unconnected 1.1 billion people in developing countries is significant. High hopes are pinned on market-based dissemination of off-grid technologies to complement the expensive extension of public grid infrastructure. In this paper, we elicit the revealed willingness-to-pay for different off-grid solar technologies in a field experiment in rural Rwanda. Our findings show that households are willing to dedicate substantial parts of their budget to electricity, but not enough to reach cost-covering prices.

this study uses a randomized experiment in rural Ethiopia to test on how quickly energy efficient technology (an improved stove) is put in use after the technologies is disseminated. We evaluate two concepts that may affect usage of a product: screening (related to valuation of a product) and sunk cost effects (based on the price the potential user paid for the product). A standard Tobit and IV-Tobit methods of estimations are used for testing sunk cost and screening effects, respectively.