Speaker
Description
Increasing the diffusion of technologies with positive externalities is a global policy priority. We investigate the market for energy-efficient biomass cookstoves in rural Senegal, which have private and external benefits, but uptake is low. Our pre-specified study covers stove producers and intermediary vendors on the supply side, and we elicit demand from rural households using real purchase offers. We randomly relax supply-side constraints among vendors by providing demand information, marketing materials, and a transportation grant to bridge the last mile to villages where customers reside. We find that demand information and marketing materials alone do not increase vendor sales, but only in combination with the transportation grant. Yet, overall sales are still too low to deliver noteworthy take-up at the household level. We also show that market conditions are structurally challenging: markups are lower than for competing products and demand is highly elastic and volatile. This combination of high risks and low profits need to be addressed by policy interventions if large-scale diffusion is the goal.
| Keyword | Technology and Innovation |
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