Collaborative Research: Prices, Peers, and Perceptions: Field Experiments on Technology Adoption in the Context of Improved Cookstoves

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Adoption of 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 study how economic incentives ("prices"), social learning ("peers"), and subjective beliefs ("perceptions") interact to influence technology adoption dynamics. We do so through a field experiment that offers new stoves at different price levels to groups of households with and without social ties to households that have already received stoves. Our results will inform and future efforts to disseminate welfare-enhancing technologies to larger population groups.Our conceptual model of households' technology adoption and use decisions highlights multiple potential interactions among prices, peers, and perceptions. Key research questions that will be addressed through our experiments include how price affects perceived quality of a new technology, how these perceptions are modified by exposure to peers that have experience with the technology, and how perceptions change over time based on one's own experience and (objective and subjective) technology performance. We implement a novel identification strategy for identifying these effects, using 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 both surveys and physical indicators of stove use and impacts on personal exposure to pollutants), 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.