AEA RC T Registr y

The American Economic Association's registry for randomized controlled trials

As COVID-19 spreads in lower-income countries, access to electricity will be critical in allowing households and firms to continue productive activities, maintain economic connections remotely, and stay up-to-date on the latest public health guidelines. Meanwhile, restrictions aimed at slowing the epidemic will cause severe short-run economic impacts, particularly in the poorest communities where many may suddenly be unable to pay their monthly bills. In Kenya, we expect severe disruptions in markets to hamper the ability of firms and households to afford ongoing electricity consumption. In anticipation of this urgent problem, we propose providing emergency electricity credits to randomly-selected low-income respondents in Kenya to study the impacts of a policy subsidising utility bills during an economic crisis.

Our proposed research leverages two ongoing projects related to electricity access in seven counties in rural Kenya. We propose to complement this with a new sample of urban residents in Nairobi. This generates a sample of over 2,000 individuals with pre-paid meters, located at a mix of home and firm locations in both urban and rural areas. A randomly selected treatment group will receive monthly top-ups on their pre-paid meters for 3 months. Top-ups will be valued at 5 USD (30 kWh) per month, which is similar to the ‘lifeline’ tariff in Kenya, and is roughly equivalent to operating a modest set of appliances for one month. A subset of participants will be offered a choice between 5 USD in electricity subsidies or a randomized cash amount between 1-6 USD (we are currently piloting to inform the exact amount). This will allow us to estimate willingness to pay for electricity access, and thus estimate the value of electricity during an economic crisis. Kenya Power prepaid top-ups can be made via M-Pesa, which will allow us to automate these top-ups and avoid in-person interactions.