Details
| Original language | English |
|---|---|
| Article number | 103514 |
| Number of pages | 15 |
| Journal | Journal of development economics |
| Volume | 176 |
| Early online date | 7 Apr 2025 |
| Publication status | E-pub ahead of print - 7 Apr 2025 |
Abstract
Solar technologies have been associated with private and social returns, but their technological potential often remains unachieved because of persistently low demand for high-quality products. In a randomized field experiment in Senegal, we assess the potential of three types of quality signaling to increase demand for high-quality solar lamps. We find no effect on demand when consumers are offered a money-back guarantee but increased demand with a third-party certification or warranty, consistent with the notion that consumers are uncertain about product durability rather than their utility. However, despite the higher willingness to pay, the prices they would pay are still well below market prices for the average household, suggesting that reducing information asymmetries alone is insufficient to encourage wider adoption. Surprisingly, we also find that the effective quality signals in our setting stimulate demand for low-quality products by creating product-class effects among those least familiar with the product.
Keywords
- Becker-DeGroot-Marschak, Information asymmetries, Quality signaling, Solar lamps, Technology adoption, Willingness to pay
ASJC Scopus subject areas
- Social Sciences(all)
- Development
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
Sustainable Development Goals
Cite this
- Standard
- Harvard
- Apa
- Vancouver
- BibTeX
- RIS
In: Journal of development economics, Vol. 176, 103514, 09.2025.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Quality signaling and demand for renewable energy technology
T2 - Evidence from a randomized field experiment
AU - Coville, Aidan
AU - Graff Zivin, Joshua
AU - Reichert, Arndt
AU - Reitmann, Ann Kristin
N1 - Publisher Copyright: © 2025 The Authors
PY - 2025/4/7
Y1 - 2025/4/7
N2 - Solar technologies have been associated with private and social returns, but their technological potential often remains unachieved because of persistently low demand for high-quality products. In a randomized field experiment in Senegal, we assess the potential of three types of quality signaling to increase demand for high-quality solar lamps. We find no effect on demand when consumers are offered a money-back guarantee but increased demand with a third-party certification or warranty, consistent with the notion that consumers are uncertain about product durability rather than their utility. However, despite the higher willingness to pay, the prices they would pay are still well below market prices for the average household, suggesting that reducing information asymmetries alone is insufficient to encourage wider adoption. Surprisingly, we also find that the effective quality signals in our setting stimulate demand for low-quality products by creating product-class effects among those least familiar with the product.
AB - Solar technologies have been associated with private and social returns, but their technological potential often remains unachieved because of persistently low demand for high-quality products. In a randomized field experiment in Senegal, we assess the potential of three types of quality signaling to increase demand for high-quality solar lamps. We find no effect on demand when consumers are offered a money-back guarantee but increased demand with a third-party certification or warranty, consistent with the notion that consumers are uncertain about product durability rather than their utility. However, despite the higher willingness to pay, the prices they would pay are still well below market prices for the average household, suggesting that reducing information asymmetries alone is insufficient to encourage wider adoption. Surprisingly, we also find that the effective quality signals in our setting stimulate demand for low-quality products by creating product-class effects among those least familiar with the product.
KW - Becker-DeGroot-Marschak
KW - Information asymmetries
KW - Quality signaling
KW - Solar lamps
KW - Technology adoption
KW - Willingness to pay
UR - http://www.scopus.com/inward/record.url?scp=105002309305&partnerID=8YFLogxK
U2 - 10.1016/j.jdeveco.2025.103514
DO - 10.1016/j.jdeveco.2025.103514
M3 - Article
AN - SCOPUS:105002309305
VL - 176
JO - Journal of development economics
JF - Journal of development economics
SN - 0304-3878
M1 - 103514
ER -