Is It All About the Money?: A Field Study on the Hypothetical Willingness to Accept and Preferences for Cash Versus Solar Lamps in Rural Villages of Ghana
Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
To end poverty and foster sustainable development, solar lamps are suggested to replace traditional off-grid sources of lighting. The purpose of this paper is to identify determinants of individuals’ hypothetical Willingness to Accept (hereafter WTA) cash for solar lamps, as well as to explain an unpredicted outcome of a field experiment carried out in Ghana, originally designed to test for the fungibility of aid. The experiment consisted of distributing vouchers for solar lamps to a poor, rural population, thereafter offering them different cash donations to test their willingness of exchanging the lamps for money. First, education, number of household members and individual income are identified as the main determinants of hypothetical WTA through statistical analysis on individual- and household data. Second, the field experiment’s unexpected result that no one preferred cash, despite being offered a sum greater than hypothetical WTA, is explained through the endowment effect and solidarity norms. The study highlights the importance of behavioural, psychological and social factors in choice behaviour analysis and proves that cash is not always preferred to in-kind aid.
Place, publisher, year, edition, pages
Hypothetical Willingness to Accept, Revealed Preference-Stated Preference Approach, Endowment Effect, Solidarity Norms, In-kind versus Cash Aid, Solar Lamps, Off-Grid, Ghana
IdentifiersURN: urn:nbn:se:uu:diva-317477OAI: oai:DiVA.org:uu-317477DiVA: diva2:1081846
Bengtsson, Niklas, Biträdande universitetslektor
Guvå, Tomas, Universitetslektor