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Reports by Brian Blankenship, Johannes Urpelainen & Jason Wong • June 21, 2019
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The following is a summary of the work by the authors, “Explaining Willingness to Pay for Pricing Reforms that Improve Electricity Service in India,” published by the Initiative for Sustainable Energy Policy in January 2019, funded by CGEP’s Faculty Grant Program.
Quality of electricity service remains poor in many developing countries. Reforms to distorted pricing mechanisms involving citizens increasing their payments in exchange for better service must be done carefully to avoid political backlash and persistent theft. Are people not willing to pay for better electricity quality because they feel entitled to electricity provision, or is it because they do not trust one another to also do their part?
In a survey conducted in rural Uttar Pradesh, India, we examine factors that influence stated willingness to pay for better service (i.e., more hours of power per day) among rural households. Our results indicate that the general levels of trust are low, and that entitlement plays less of a role as to whether households are willing or not to contribute to improved electricity quality. Low willingness to pay remains a major obstacle to pricing reform. Generalized trust is strongly associated with higher willingness to pay for better electricity. Delays in service improvements and a lack of community support for pricing reform reduce willingness to pay for better quality.
To better foster public support for increasing payments in return for better service, we provide three recommendations as follows.
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Reports by Brian Blankenship, Johannes Urpelainen & Jason Wong • June 21, 2019