NSF Economics Grant
Collaborative Research: Prices, Peers, and Perceptions: Field Experiments on Technology Adoption in the Context of Improved Cookstoves.” Economics, National Science Foundation. (SES 1528811) $675,000. 2015-2018. PI: Katherine Dickinson. Co-PIs: Michael Hannigan, Zachary Brown, Abraham Oduro.
Adoption of many potentially welfare-improving technologies remains frustratingly low in many contexts. Improved cookstoves are a prime example: while cleaner-burning stove technologies have potential health, environmental, and social benefits, efforts to disseminate these technologies have fallen short and the practice of cooking with biomass over open fires remains dominant throughout much of the developing world. The central aim of this proposal is to contribute to a more scientific understanding of the interactions between economic incentives ("prices"), social learning ("peers"), and subjective beliefs ("perceptions") in technology adoption dynamics. Specifically, this project develops a conceptual model of households’ technology adoption and use decisions that motivates exploration of the following research questions:
- How are prior perceptions of the benefits of a new technology affected by the technology’s price? For example, does higher price signal higher quality to target users?
- How do prior perceptions of a new technology vary based on exposure to peers that have experience with that technology? Specifically, how do peers’ adoption and use histories help potential users of a technology learn about product quality?
- How does peers’ experience influence the relationship between price, on the one hand, and perceptions, technology adoption and use outcomes, on the other? Do peer effects increase or decrease the price elasticity of demand for the new technology?
- How do perceptions of a technology change over time among households that adopt that technology initially? How do these perceptions relate to objective measures of stove performance (e.g., personal exposure to pollutants), and what is the relationship between perceptions and technology use over time?
To address these question, the research team will leverage an ongoing NSF-funded study that randomly introduced improved cookstoves to 200 households in Northern Ghana. The experimental design involves offering new stoves at different price levels to groups of households with and without social ties to the households that received stoves as part of this prior study. The interdisciplinary, international study team is uniquely positioned to conduct this research, which will employ novel survey and instrument-based measures of key outcomes, including stove use and stove performance.
The proposed research involves a novel identification strategy for identifying peer effects, permitting the examination of how beliefs are constructed as well as analysis of their interactions with price effects. This approach uses the preexisting and exogenously controlled distribution of free stoves in combination with uncorrelated, cluster-randomized assignment to different stove subsidy levels. By explicitly measuring perceptions in conjunction with other outcome variables in the experiment (including physical indicators), the researchers will be able to test specific models about how prices and peers’ prior adoption interact in belief formation - a key issue in the technology adoption literature.
Broader impacts of the proposed research include education and training opportunities for graduate and undergraduate students at the University of Colorado and North Carolina State University, community engagement and dissemination of research results within the study area in Northern Ghana, and development of broader lessons to inform future efforts to disseminate clean cookstoves and other welfare-enhancing technologies beyond the study area.