Studies

Encouraging Cleaner Cooking: Digital Finance and LPG Use in Ghana

Motivation

Three billion people globally use traditional fuels such as wood, kerosene, and coal, for cooking. These fuels cause millions of untimely deaths, deforestation, and climate change. Specifically, in Ghana, air pollution from cooking is a leading contributor to death and disability. Women and children are the most exposed to harmful emissions, as they commonly collect firewood and cook in enclosed areas.1

Liquid petroleum gas (LPG) is the leading alternative to traditional fuels in Ghana. Its use is associated with a reduced time burden and improved health outcomes amongst women. Yet barriers to adoption abound, including the cost of stoves and fuel, the distance of suppliers, the need to purchase fuel in bulk, high supply costs, and intra-household bargaining power.2,3,4 However, digital financial services (DFS), have the potential to reduce these barriers.

Objective

The research team hypothesizes that a lack of bargaining power and an inability to act on preferences especially inhibit the adoption of LPG amongst women in Ghana. Further, the team posits that DFS, in conjunction with targeted financial incentives, can relax these specific constraints. The pilot will test this hypothesis via two interventions. First, the project will offer participant households a mobile platform to link them with LPG suppliers and neighbors they could potentially partner with to bundle LPG purchases. The platform will also provide tools such as digital savings accounts and small, low-cost credit lines designated for LPG purchases. This intervention will be alternatingly offered to men and women. Second, the team will offer participants individual-level and community-level incentives to save. The pilot will test whether these interventions bridge the gap between LPG supply and demand, facilitate transactions, coordinate demand, and increase women’s bargaining power over purchases. The pilot study will survey at least 100 households and qualitative data will be collected from LPG distribution companies and DFS providers.

Proposed impact

This pilot study will foremost contribute to the literature on the adoption and use of cleaner energy technologies. Additionally, it will contribute to a growing body of literature addressing the impact of mobile digital accounts on socially desirable outcomes, as well as the supply and demand of energy access in developing contexts. 

The pilot study is expected to produce a finalized randomized controlled trial (RCT) design, including a final sample and power calculations, a fully tested DFS product, and a solidified partnership with DFS providers. The full-scale RCT is expected to increase LPG use amongst treated households. Moreover, the study aims to generate policy recommendations for the government of Ghana on pricing and delivery models and insights regarding the benefits of using DFS amongst marginalized populations.


Photo by Axel Fassio/CIFOR, licensed under CC BY-NC-ND 2.0

1 Burning opportunity: clean household energy for health, sustainable development, and wellbeing of women and children. Geneva: World Health Organization, 2016  

2 Agbokey et al. Determining the Enablers and Barriers for the Adoption of Clean Cookstoves in the Middle Belt of Ghana—A Qualitative Study. Int. J. Environ. Res. Public. Health, Jan. 2019.  

3 Abdulai et al., Experiences with the Mass Distribution of LPG Stoves in Rural Communities of Ghana. EcoHealth, 2018. 

4 Dalaba et al., Liquified Petroleum Gas (LPG) Supply and Demand for Cooking in Northern Ghana. EcoHealth, 2018.

Overview

Associated Institute: Innovations for Poverty Action (IPA)

Associated Investigators: Kelsey Jack, Bren School of Environmental Science & Management; Darby Jack, Columbia University; Dean Karlan, Northwestern University; & Christopher Udry, Northwestern University

Country: Ghana

Implementation Partners: Kintampo Health Research Center (KHRC)

WEE-DiFine thematic areas: Bargaining power; transaction costs

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