Abstract. In addition to generating a negative environmental externality, a household’s water consumption entails another “market failure”: household members free-ride off each other and overconsume. The problem stems from consumption being billed at the household level and the difficulty of monitoring one another’s consumption. We document the importance of this phenomenon in urban Zambia by combining utility billing records and randomized person-specific price variation. We derive and empirically confirm the following prediction: Individuals with weaker incentives to conserve under the household’s financial arrangements reduce water use more when their person-specific price increases. Another prediction is that this overconsumption problem is more acute when the financial benefit of a lower utility bill is shared unevenly among household members. We show that households indeed seem more responsive to a change in the household-level price of water when their financial arrangements are more equal. Our results offer a novel explanation for the low price sensitivity of residential water (and electricity) consumption.

Abstract. Clean-cooking transitions have the potential to generate large public health, environmental and societal gains for 2.6 billion people in the Global South. Here we use data from Ghana’s largest household energy survey (n = 7,389) to provide two main insights. First, regression analysis of 13 commonly cited socio-economic and demographic determinants of household fuel use indicates remarkably different relationships with clean-fuel use at different stages of the transition process. We propose a stage-based transition framework that can help inform the rollout of clean-cooking interventions. Second, we identify factors that are associated with the exclusive use of liquefied petroleum gas (LPG) using a statistically powered sample of exclusive LPG users (n = 693). We show that, all else equal, increases in wealth and urbanicity are not—contrary to conventional wisdom—associated with a transition from primary to exclusive LPG use. Whereas further research is needed to determine causality, our findings highlight the potential for more careful measurement, isolating each stage of the clean-cooking transition, to inform new insights and policy opportunities.

Abstract. We examine the feasibility of targeting subsidies through non-linear pricing. We consider a policy maker who wants to increase the use of cleaner cooking fuel, while keeping the subsidy budget low by targeting subsidies to more price sensitive individuals. Fuel is sold in cylinders of different sizes, allowing for size-differentiated pricing, but not limits on the frequency of purchase. We show that a separating equilibrium can be sustained without purchase limits. Next, we demonstrate implementation in two stages: (1) we gather the empirical inputs for a sufficient statistic based approach to menu design, and then (2) test the optimal non-linear price menu against counter-factual linear pricing. Relative to the counterfactual, allocating more of the subsidy to smaller purchases achieves the same level of LPG demand with 30% less in public expenditure. Because poorer households have a preference for smaller-sized purchases, non-linear pricing is also progressive in our setting.

Infrastructure investments to expand and improve the electricity grid in low-income countries are often justified with the promise that electricity promotes growth. We investigate a necessary condition for this promise to hold: over time, households and businesses need to use electricity at increasing and minimally productive levels. Preliminary results with meter-level consumption data from central Ghana show this is not the case, usage is low and stagnant, but price incentives could work with different types of customers.

Micro-entrepreneurs work simultaneously on two optimization problems: profit at the firm and utility at home. We focus on these “firm-household” agents in central Ghana and examine their electricity consumption across residential and commercial meters. Using a randomized field experiment, we compare the effects of cash transfers versus in-kind commercial electricity transfers on both types of electricity use. Our research seeks to determine whether firm-households respond differently to wealth shocks based on the form of the transfer and whether they shift consumption between home and business settings to enjoy a benefit targeted at the enterprise. This study aims to shed light on firm-households' behavior in low- and middle-income countries, offering insights into their decision-making processes and the effectiveness of policy interventions targeted at helping small businesses grow. Results are forthcoming.

It has been established that cash transfers can improve a wide range of socio-economic outcomes. In this study, we partner with the African Population and Health Research Centre to offer self-help groups to beneficiaries one of Kenya's largest national cash transfer programs, the Inua Jamii. We track whether these community groups impact and improve beneficiaries use of the transfers.