Testing approaches to improve customer bill payment in Kenya.

Last registered on April 07, 2021

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Pre-Trial

Trial Information

General Information

Title

Testing approaches to improve customer bill payment in Kenya.

RCT ID

AEARCTR-0007477

Initial registration date

April 06, 2021

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

April 07, 2021, 10:34 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

Kenya

Region

Primary Investigator

Name

David Fuente

Affiliation

University of South Carolina

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Other Primary Investigator(s)

PI Name

Joseph Cook

PI Affiliation

Washington State University

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PI Name

Richard Mulwa

PI Affiliation

University of Nairobi

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Additional Trial Information

Status

In development

Start date

2021-04-06

End date

2022-03-31

Keywords

Environment & Energy, Finance & Microfinance

Additional Keywords

customer debt, social norms

JEL code(s)

Q25, Q56

Secondary IDs

Abstract

In order for utilities to provide high quality water and sanitation services to growing urban populations, they must have a sufficient and stable revenue stream. Utilities must price services to cover the cost of delivering services to existing customers and to invest in expanding the network to reach those who currently lack access to them. Even as utilities make progress in pricing services better, customer arrears – i.e., customers who do not pay their bills on time or in full – can undermine utilities’ financial sustainability. Currently, utilities in Kenya have substantial portions of customers with arrears on their accounts. In cooperation with a large utility in Kenya this project will implement a randomized control trial (RCT) to test the efficacy of electronic (mobile SMS) messages in improving customer bill payment.

External Link(s)

Registration Citation

Citation

Cook, Joseph, David Fuente and Richard Mulwa. 2021. "Testing approaches to improve customer bill payment in Kenya.." AEA RCT Registry. April 07. https://doi.org/10.1257/rct.7477-1.0

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Experimental Details

Interventions

Intervention(s)

Intervention Start Date

2021-05-13

Intervention End Date

2021-12-13

Primary Outcomes

Primary Outcomes (end points)

Primary outcomes of interest: total arrears and probability of on time bill payment. Secondary outcomes of interest: probability of a customer making any payment and percent of total amount billed paid over the study period.

Primary Outcomes (explanation)

Through our partnership with the municipal water provider (NCWSC), we have ongoing access to information to whether households with municipal piped connections pay their water and sewer bills within the normal 30-day payment window and or whether they have arrears (unpaid balances) on their account. The amount of customer arrears is our key dependent variable. A second outcome variable of interest is the probability of customers paying their bill on time. In addition to our primary outcome variables of interest, we plan to examine the probability of a customer making any payment towards their bill and the percent of total billed amount paid over the study period.

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

Our study population of interest is all customers who have had arrears on their account at least once in the 50 months preceding the study. We exclude those customers who have had arrears continuously for the 50 months prior to the study.

Experimental Design Details

Randomization Method

randomization done in office by a computer

Randomization Unit

customer accounts

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

60,000 customers

Sample size: planned number of observations

60,000 customers

Sample size (or number of clusters) by treatment arms

10,000 customers per treatment arm

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Using billing data from 2017-2021, we calculate the mean probability of on-time payment has been 61.5%. The mean arrears as of February 2021 among customers is 3,248 KSH (std dev= 10,732 KSH). With these priors, the sample sizes given above, and a power of 80%, the minimum detectable difference in the probability of on-time payment is 1.92 percentage points. The minimum detectable effect size on the total balance of arrears is Ksh 425.

Supporting Documents and Materials

IRB