Why do households forego high returns from technology adoption? Evidence from improved cooking stoves in Burkina Faso

•The assessed improved stove effectively saves 20–28 percent of firewood.•These savings imply an annual return of investment of more than 300 percent.•In spite of these high returns adoption rates are very low.•Our findings suggest that liquidity constraints are the main barrier to adoption.•Contrar...

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Bibliographic Details
Published in:Journal of economic behavior & organization 2015-08, Vol.116, p.187-205
Main Authors: Bensch, Gunther, Grimm, Michael, Peters, Jörg
Format: Article
Language:English
Subjects:
Africa
Burkina Faso
Cooking
Developing countries
Energy access
Household technology adoption
Households
Innovation
Investment
Liquidity
Liquidity constraints
Ovens & stoves
Rates of return
Studies
Sub-Saharan Africa
Subsidies
Technology adoption
Traditions
Weak beliefs
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Summary:•The assessed improved stove effectively saves 20–28 percent of firewood.•These savings imply an annual return of investment of more than 300 percent.•In spite of these high returns adoption rates are very low.•Our findings suggest that liquidity constraints are the main barrier to adoption.•Contrary to conventional wisdom, cultural traits do not seem to play an important role. Around 3 billion people in developing countries rely on woodfuels for their daily cooking needs with profound negative implications for their workload, health, and budget as well as the environment. Improved cooking stove (ICS) technologies appear to be an obvious solution in many cases. Indeed we find that users of a very simple ICS in urban Burkina Faso need between 20 and 30 percent less firewood compared to traditional stoves, making the investment highly profitable. In spite of these high returns and great efforts made by the international community to disseminate ICSs, take-up rates are – similar to many other high-return innovations – strikingly low; in our case a mere 10 percent. When exploring adoption decisions of households, we find suggestive evidence that a major deterrent to adoption is the upfront investment costs. They seem to be much more important than access to information, taste preferences, or the woman's role in the household. These findings suggest that perhaps more direct promotion strategies such as subsidies would help households to overcome liquidity constraints, and would hence improve adoption rates.
ISSN:0167-2681
1879-1751
DOI:10.1016/j.jebo.2015.04.023