In many sub-Saharan African economies, solar lighting product regulation is weak, with low-quality products being able to enter the market and mimic higher-quality products, resulting in distorted quality signals for buyers. Our baseline data show that consumers have difficulties in differentiating between good quality and bad quality technologies. The consequence is an inflated demand for the latter (i.e., there exists market spoilage) and potential welfare loss (Schmalensee, 1982; Wilde, 1981).
The proposed study has two objectives. First, it aims to examine pilot interventions aimed to overcome the problem of imperfect information faced by Senegalese consumers when choosing among different lighting products. We test whether pilot interventions can close the consumer’s information gaps and therefore counter market spoilage, i.e., increase demand for Lighting Global certified products relative to inferior products. Our results are of direct relevance for Lighting Africa (LA) whose primary goal is to expand access to better lighting for low-income households by developing third-party quality assessments of various lighting products aimed at accelerating market growth of quality solar products and countering market spoilage by inferior products.
The second objective of the proposed study is to examine the development impacts of the provision of high quality solar lanterns to provide evidence for the alignment between LA’s activities and the World Bank’s goal of reducing extreme poverty.