Demand for Electricity Connection in Rural Areas : The Case of Kenya
AbstractA modern form of energy, in particular electricity for household use, is an important vehicle in alleviating poverty in developing countries. However, access and costs of connecting to this service for most poor in these countries is inconceivable. Policies promoting electricity connection in rural areas are known to be beneficial in improving the socio-economic and health well-being for households. This paper examines willingness to pay (WTP) for rural electrification connection in Kisumu district, Kenya, using the contingent valuation method (CVM). A nonparametric and a parametric model are employed to estimate WTP values for two electricity products: grid electricity (GE) and photovoltaic (PV) electricity. The results indicate that respondents are willing to pay more for GE services than PV and households favoured monthly connection payments over a lump sum amount. Some of the policies suggested in this paper include: subsidizing the connection costs for both sources of electricity, adjusting the payment periods, and restructuring the market ownership of providing rural electricity services.
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Bibliographic InfoPaper provided by University of Bath, Department of Economics in its series Department of Economics Working Papers with number 17070.
Date of creation: Nov 2009
Date of revision:
double bounded; contingent valuation; electricity connection; rural; willingness to pay (wtp);
This paper has been announced in the following NEP Reports:
- NEP-AFR-2009-11-21 (Africa)
- NEP-ALL-2009-11-21 (All new papers)
- NEP-DEV-2009-11-21 (Development)
- NEP-ENE-2009-11-21 (Energy Economics)
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