Panel Paper: Economics of a Light Bulb: Experimental Evidence On Cfls and End-User Behavior

Saturday, November 9, 2013 : 2:05 PM
Boardroom (Ritz Carlton)

*Names in bold indicate Presenter

Robyn Meeks, University of Michigan
Residential access to modern energy and lighting is important for development in that it improves living standards and productivity (World Bank, 2006). However, developing countries often face severe constraints on available electricity, which result in blackouts and prices potentially as high as those observed in wealthier nations. In the developing world, where lighting is a major component of residential electricity consumption, energy efficient technologies, such as compact fluorescent lamps (CFLs), can reduce overall household electricity demand while permitting utilities to simultaneously reach a greater number of customers with existing supplies and meeting conservation goals. Still, when CFLs have been introduced through mass replacement programs at a zero or subsidized price, their use is often discontinued once the consumer is required to pay the full price. In order to better understand the adoption, continued use and diffusion process of the CFL technology, the proposed study uses randomized experiments to inspect two major mechanisms: (1) the “rebound” or behavioral responses that boost consumption and offset CFLs’ technologically feasible electricity savings and (2) the role of “peer” networks in spreading information on the technology. As initial take up of CFL lamps may be limited because the willingness to pay (WTP) for them is lower than the market price, WTP must be elicited to study these two mechanisms. We present details of the project’s experimental design as well as preliminary evidence from the baseline survey on the determinants of demand for this energy efficient technology.