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Willingness to pay for electricity access in extreme poverty: Evidence from sub-Saharan Africa

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  • Sievert, Maximiliane
  • Steinbuks, Jevgenijs

Abstract

Improving electricity access in low-income countries is complicated because of high service costs and low electricity consumption levels in rural areas. This study elucidates this problem by analyzing poor Sub-Saharan African households’ willingness-to-pay for different types of electricity access, including both grid and lower cost off-grid technologies. We show both theoretically and empirically that at low levels of income, low-cost decentralized off-grid solar technologies provide the highest utility from the households’ perspective. We, therefore, recommend concentrating the near-term rural household electrification efforts on these technologies.

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  • Sievert, Maximiliane & Steinbuks, Jevgenijs, 2020. "Willingness to pay for electricity access in extreme poverty: Evidence from sub-Saharan Africa," World Development, Elsevier, vol. 128(C).
    • Handle: RePEc:eee:wdevel:v:128:y:2020:i:c:s0305750x1930508x
    DOI: 10.1016/j.worlddev.2019.104859
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    3. Florian Egli & Churchill Agutu & Bjarne Steffen & Tobias S. Schmidt, 2023. "The cost of electrifying all households in 40 Sub-Saharan African countries by 2030," Nature Communications, Nature, vol. 14(1), pages 1-10, December.
    4. Joern Falk & Björn Globisch & Martin Angelmahr & Wolfgang Schade & Heike Schenk-Mathes, 2022. "Drinking Water Supply in Rural Africa Based on a Mini-Grid Energy System—A Socio-Economic Case Study for Rural Development," Sustainability, MDPI, vol. 14(15), pages 1-19, August.
    5. Zaman, Rafia & Das, Debasish Kumar & van Vliet, Oscar & Posch, Alfred, 2021. "Distributional inequality in market-based solar home system programs: Evidence from rural Bangladesh," Energy Economics, Elsevier, vol. 103(C).
    6. Murshed, Muntasir & Ozturk, Ilhan, 2023. "Rethinking energy poverty reduction through improving electricity accessibility: A regional analysis on selected African nations," Energy, Elsevier, vol. 267(C).
    7. Bajo-Buenestado, Raúl, 2021. "The effect of blackouts on household electrification status: Evidence from Kenya," Energy Economics, Elsevier, vol. 94(C).
    8. Williams S. Ebhota, 2021. "Leveraging on Sustainable Energy Transition to Change the Energy Narrative of the Dark Continent," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 409-416.
    9. Richard S. J. Tol, 2023. "Navigating the energy trilemma during geopolitical and environmental crises," Papers 2301.07671, arXiv.org.
    10. Pelz, Setu & Aklin, Michaël & Urpelainen, Johannes, 2021. "Electrification and productive use among micro- and small-enterprises in rural North India," Energy Policy, Elsevier, vol. 156(C).
    11. Hovhannisyan,Shoghik & Stamm,Kersten Kevin, 2021. "Sectoral Value Added — Electricity Elasticities across Countries," Policy Research Working Paper Series 9815, The World Bank.
    12. Berkouwer, Susanna B. & Biscaye, Pierre E. & Puller, Steven & Wolfram, Catherine D., 2022. "Disbursing emergency relief through utilities: Evidence from Ghana," Journal of Development Economics, Elsevier, vol. 156(C).
    13. Dang,Hai-Anh H. & Kilic,Talip & Carletto,Calogero & Abanokova,Kseniya, 2021. "Poverty Imputation in Contexts without Consumption Data : A Revisit with Further Refinements," Policy Research Working Paper Series 9838, The World Bank.
    14. Mahadevan, Meera & Meeks, Robyn & Yamano, Takashi, 2023. "Reducing information barriers to solar adoption: Experimental evidence from India," Energy Economics, Elsevier, vol. 120(C).
    15. Dastan Bamwesigye, 2023. "Willingness to Pay for Alternative Energies in Uganda: Energy Needs and Policy Instruments towards Zero Deforestation 2030 and Climate Change," Energies, MDPI, vol. 16(2), pages 1-21, January.
    16. Meriggi, Niccolò F. & Bulte, Erwin & Mobarak, Ahmed Mushfiq, 2021. "Subsidies for technology adoption: Experimental evidence from rural Cameroon," Journal of Development Economics, Elsevier, vol. 153(C).
    17. d'Adda, Giovanna & Mahmud, Mahreen & Said, Farah & Bonan, Jacopo, 2020. "The Role of Flexibility and Planning in Repayment Discipline: Evidence from a Field Experiment on Pay-as-You-Go Off-Grid Electricity," RFF Working Paper Series 20-14, Resources for the Future.
    18. Hashemi, Majid, 2021. "The economic value of unsupplied electricity: Evidence from Nepal," Energy Economics, Elsevier, vol. 95(C).
    19. Lukuyu, June & Shiran, Myriam & Kennedy, Ryan & Urpelainen, Johannes & Taneja, Jay, 2023. "Purchasing power: Examining customer profiles and patterns for decentralized electricity systems in East Africa," Energy Policy, Elsevier, vol. 172(C).
    20. Deutschmann, Joshua W. & Postepska, Agnieszka & Sarr, Leopold, 2021. "Measuring willingness to pay for reliable electricity: Evidence from Senegal," World Development, Elsevier, vol. 138(C).
    21. Berkouwer, Susanna & Biscaye, Pierre & Hsu, Eric & Kim, Oliver & Lee, Kenneth & Miguel, Edward & Wolfram, Catherine, 2023. "Money or Power? Choosing Covid-19 aid in Kenya," Energy Economics, Elsevier, vol. 127(PB).

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    More about this item

    Keywords

    Electricity access; Extreme poverty; Sub-Saharan Africa; Willingness-to-pay;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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