Demand for environmental health technologies: a clean cookstove experiment in Northern Ghana to investigate effects of prices and peers

Abstract

BACKGROUND AND AIMS: Across a wide range of environmental health issues, understanding the drivers of technology adoption and behavior change is key to achieving exposure reductions. In areas reliant on biomass for cooking, reducing exposure to household air pollution requires shifts toward cleaner cooking technologies. We conducted an experiment in Northern Ghana to assess how prices and peer effects shape demand for two models of improved cookstoves. METHODS: Our experiment involved offering stoves at randomized prices to peers and non-peers of households who received free stoves during a prior study. This experimental design allows us fully estimate a two-good demand system for the high- and low-end stoves, and to econometrically identify complex changes in demand for these goods owing to peers’ adoption of the stoves. RESULTS: The peer treatment only affected demand for the less familiar and more expensive stove, making users less price-sensitive while leaving aggregate willingness to pay unchanged. We also find evidence that users found the two stoves offered to be complements: users preferred purchasing one of each stove over purchasing two of either stove. Estimated price elasticity effects translate into substantial positive or negative impacts to the predicted cost-effectiveness of subsidies for these technologies, depending on marketing costs and the relative performance of the two stoves. CONCLUSIONS: Programs and policies that seek to expand use of health-improving technologies must examine how social context and prior experiences with similar technologies among peers shape households’ decision. "Market spoilage” is a risk when low-quality products are distributed in free trials, and these risks should be considered in the design of environmental health promotion strategies. KEYWORDS: Peer effects, social learning, environmental health, cookstoves, demand modeling