What Impedes Efficient Product Adoption – Evidence from Randomized Variation in Sales Offers for Improved Cookstoves in Uganda
Many people do not purchase products that appear beneficial. For example, the price of an efficient cookstove can be less than a few months’ savings on fuel. If liquidity constraints, present bias, and poor information on fuel savings and stove durability are barriers, then a novel sales offer combining a free trial, time payments, and the right to return the stove at any time should increase sales. In a randomized trial, this sales offer increases sales of an efficient charcoal-burning stove in Kampala, Uganda, from 5% to 45%. We provide additional evidence that both liquidity constraints and imperfect information were important barriers.