Prepaid electricity contracts lower enforcement costs for utilities but may burden consumers. Specifically, consumers facing liquidity constraints and transaction costs will struggle to make frequent, large, or timely purchases. Do these market frictions, common in many rural, low-income communities, contribute to low demand and limited consumer welfare from electricity? I randomly offer 2,000 consumers in rural Rwanda a line of credit for electricity payments, which both alleviates liquidity constraints and lowers transaction costs. 20\% of consumers borrow and demand for the line of credit is highly inelastic; however, it does not significantly change demand for electricity. I rule out all but one mechanism: treated consumers make 8\%--18\% fewer transactions, suggesting that the primary benefit of the line of credit is time savings. The results indicate that liquidity constraints and transaction costs are not limiting intensive margin demand for electricity, strengthening the argument for prepaid electricity contracts but highlighting the low benefits of electrification for consumers.
We know little about demand for electricity in developing country settings after electrification, on the intensive margin. This is despite predictions that most growth in energy use will come from developing countries in the coming decade. In this paper, I study two incentives offered by a pay as you go solar company to 3,200 randomly selected customers in rural Kenya and Rwanda. Both incentives lower the price on selected units of electricity, but differ in the levels of liquidity and attention required to qualify for them. The incentives do not significantly alter demand for electricity. I can largely rule out liquidity constraints and variable utility from electricity as potential explanations, but inattention may contribute to consumer non-responsiveness. I show that consumer non-responsiveness implies a relatively high lower bound on consumer surplus from electricity: $26.31 per household per year in Rwanda and $88.01 in Kenya. Under assumptions allowing for substantial consumer inattention, my estimates drop to $13.15 and $44 in Rwanda and Kenya. My results expand our understanding of consumer decisions about electricity use in rural, low-income settings and suggest that the benefits of electrification in such contexts may be larger than previously believed.
Cleanly produced electricity can help achieve universal energy access with minimal climate impacts, but electrification remains low among rural, low-income populations. I examine an understudied explanation: the relationship between electrification and intensive margin electricity prices. A subsidy for solar electricity in Togo reduced intensive margin electricity prices by 18%–42% without changing upfront costs. I show that the subsidy increased adoption of the least expensive systems by 203% and higher capacity systems by 40%–57%. My results illustrate the salience of intensive margin costs in the adoption of consumer durables and indicate that long-term affordability is critical in electrification decisions.
With Ethan Ligon
Household consumption expenditures are generally the preferred measure of household welfare in low income countries, but surveying households about expenditures is costly. Can short message service (SMS) surveys enable researchers and policymakers to measure household welfare at a high frequency in low income countries? We detail the implementation of a SMS survey on household composition and consumption expenditures in Rwanda and evaluate the efficacy of such surveys for gathering high-frequency data. We successfully calculate a measure of household welfare for households that respond to the SMS survey, and we find that SMS surveys are substantially less costly than equivalent in-person surveys; however, nonresponse is a significant problem. For this reason, our proposed use of high-frequency SMS surveys is to combine them with in-person baseline surveys and leverage the panel nature of the data to compute weights that correct for nonresponse bias.
With Wenfeng Qiu
Measures like pre-analysis plans ask researchers to describe planned data collection and justify data exclusions, but they provide little enforceable oversight of primary data collection. We show that a simple algorithm can select large subsets of data that yield economically meaningful and statistically significant treatment effects. The subsets cannot be distinguished from a random sample of the original data, rendering the selection undetectable if peer reviewers are unaware of the size of the original dataset. Our results hold using simulated data and replication data from a well-known study. We show that there are few natural deterrents to dataset manipulation: the results in our selected subset are robust to a range of alternative specifications, our algorithm performs well under complex sampling strategies, and our subset can yield artificially high effects on multiple outcomes. We conclude by proposing a measure to prevent such manipulation in field experiments.
Despite growing evidence on the determinants of psychosocial wellbeing, we know comparatively little about the marginal impacts of different types of interventions on psychosocial versus economic outcomes. We conduct a randomized control trial among women in Rwanda that benchmarks two programs against an unconditional cash transfer, implemented in conjunction with existing anti-poverty interventions. The first is psychologically-targeted and focuses on promoting personal agency: self-confidence, sense of value, and perceived social status. The second program targets specific skills: goal setting, public speaking, and networking. The psychologically-targeted intervention leads to significant improvements across a range of psychosocial outcomes, but no economic gains relative to the cash transfer. By contrast, the skills-based program improves economic outcomes but yields smaller effects on psychosocial outcomes than the psychologically-targeted intervention. Our results suggest that well-designed, low-cost programs can outperform cost-equivalent cash transfers in terms of impacts on psychosocial and economic outcomes.
Work in Progress
The Economics of Women Entrepreneurs
Female-owned enterprises have the potential to spur inclusive growth and contribute to economic empowerment in settings where women have been traditionally marginalized, but current evidence finds puzzlingly low returns to both financial and human capital interventions. This project aims at understanding whether a holistic entrepreneurship program that tackles multiple growth constraints simultaneously can promote business growth and its consequences for household dynamics.