Abstract
Replication files for manuscript: Magnitudes for equitable household energy subsidies: transferable insights from improved cookstoves in developing countries.
Greater uptake of improved cookstoves by disadvantaged households has the potential to improve health, equality, and environmental outcomes. We therefore investigate the sensitivity of households to subsidies for proposed investments in an improved cooking stove (ICS). Using World Bank microdata from over 16,000 households in eight developing countries, we find that financial inclusion and higher subsidies are key factors promoting willingness to pay for ICSs. Households with a formal bank account are more likely to intend to purchase an ICS by seven percentage points. We then normatively define equitable subsidies as those which equalise willingness-to-pay probability across economic groups. Next, we calculate equitable subsidy proportions, which give households an equal probability of being willing to pay, when comparing households with a formal bank account to others. When there are no subsidies for households with a formal bank account, the equitable subsidy proportions for households without a formal bank account are approximately 26% of the purchase price. Results are similar with a broader asset-related variable in place of bank accounts. Equitable subsidy proportions can similarly be used to promote other household investments.