Evidence-based Cooling Strategies for a Warming World: Assessing Demand for Efficient Fans in India

Last registered on June 15, 2022

Pre-Trial

Trial Information

General Information

Title
Evidence-based Cooling Strategies for a Warming World: Assessing Demand for Efficient Fans in India
RCT ID
AEARCTR-0009524
Initial registration date
June 06, 2022

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
June 15, 2022, 10:05 AM EDT

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

Locations

Region

Primary Investigator

Affiliation
UC Berkeley

Other Primary Investigator(s)

PI Affiliation
UC Santa Barbara
PI Affiliation
IIT Bombay

Additional Trial Information

Status
On going
Start date
2020-01-01
End date
2023-04-01
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
As global temperatures rise, more people are exposed to heat-related risks. Coping with heat extremes is particularly challenging for people with lower socioeconomic status who cannot afford air conditioning. A recent study estimates that over 300 million people in India are at high risk of extreme heat due to a lack of access to cooling (SE4ALL, 2022). Warmer temperatures are also straining India’s aging power system; electricity demand surges during hot weather events have triggered cascading outages across the country in recent years.

Delivery of sustainable and accessible cooling solutions in India will require innovation and intervention. Fans are the most common cooling appliance used by low-income households in India. Energy-efficient fans, which consume less than half the energy of standard induction fans, are rarely available in rural and peri-urban areas of India where a majority of low-income households live. Demand for energy-efficient appliances in these markets is perceived to be low, and the costs of building out distribution networks, marketing, and sales teams to support new product offerings are high.

We investigate the conditions under which rural households in India are willing and able to purchase energy-efficient BLDC fans. Working closely with India’s Energy Efficiency Services Limited (EESL) and a network of Self-Help Groups (SHGs) in Bihar, we combine a randomized control trial with a supply-side intervention that provides training for local shop owners in procurement, distribution, marketing, and sales support for energy-efficient fans. Fan purchase prices are randomized across customers and local warranty support is randomized across clusters of local shops.

The aims of this study are threefold (1) to determine the level of consumer demand for energy-efficient fans at different price points; (2) to determine whether demand at a given price point increases with investments in local supply chain/warranty support and (3) to assess the potential role of a well-established SHG network in accelerating the diffusion of energy-efficient fans to under-served, low-income market segments.

External Link(s)

Registration Citation

Citation
Deshmukh, Ranjit, Meredith Fowlie and Jayendran Venkateswaran. 2022. "Evidence-based Cooling Strategies for a Warming World: Assessing Demand for Efficient Fans in India ." AEA RCT Registry. June 15. https://doi.org/10.1257/rct.9524-1.0
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Experimental Details

Interventions

Intervention(s)
Randomization of efficient BLDC fan purchase prices
Randomization of local warranty support
Supply-side support to facilitate local procurement/distribution/marketing/sales
Intervention Start Date
2022-03-15
Intervention End Date
2022-07-31

Primary Outcomes

Primary Outcomes (end points)
Households' willingness to pay for a BLDC fan.
Purchase/take-up of fans across a range of offered prices.
Impact of local warranty support on WTP.

Primary Outcomes (explanation)
We offer BLDC fans for sale to households who have previously expressed interest in purchasing a fan. Willingness to pay (WTP) for BLDC fans is inferred from an incentive-compatible BDM style mechanism. This experiment is conducted in the context of a real fan purchase at participating local shops. The value of local warranty support is also inferred from the difference in WTP, conditional on observable household attributes (e.g. income) and participant characteristics (e.g. risk aversion).

Secondary Outcomes

Secondary Outcomes (end points)
To shed more light on what generates heterogeneity in WTP, we will conduct additional exploratory analysis to test whether WTP varies systematically with:

• Baseline electricity expenditures/consumption levels
• Baseline energy literacy/prior beliefs about energy intensity of end uses.
• Baseline demographics (including income and savings)
• Baseline risk aversion
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
First, we elicit the willingness-to-pay (WTP) for BLDC fans in a sales trial using an incentive-compatible BDM style mechanism. This demand elicitation activity takes place at local shops that are participating in our study. Households interested in purchasing a new fan make sales appointments. This sales trial design will allow us to determine consumer demand for energy-efficient fans at different price points.

Second, for half the of the participating shops, we provide additional training and warranty support. Households are informed about this local warranty support when they are being educated about the study. Communications provide information about how any problems with the fan can be locally addressed. EESL provides a 2.5-year warranty for BLDC fans. But the web-based warranty support system is ill-equipped to support low-income customers in far-flung markets. To augment the manufacturer's warranty, we provided a 3-month local warranty whereby households could get a free replacement or repair supported by the local shop if technical problems arise. Random assignment of warranty support will allow us to determine whether investments in local supply chain support increase consumer demand.

In addition, we will assess the potential role of local SHGs and associated local shops and distribution networks in bringing energy-efficient appliances to under-served, low-income markets.
Experimental Design Details
We worked closely with eight dedicated local shops, each serving a set of distinct villages. Each shop serves around 12 distinct villages.
Shop-level participation requirements included being located in close proximity to other shops selling standard fans and space to install a demo fan in the shop.

Teams of research and field staff were assigned to each shop. Project targets were allocated across the eight shops. In the design stage of the experiment these targets were as follows:

Approx. Targets for Each Shop Overall
Awareness 1300 HHs ~10400 HHs
Demonstration activity 760 HHs 6000 HHs
Enrollment 380 HHs 3000 HHs
Final Survey 190 HHs 1500 HHs
Installations 60 HHs 500 HHs


Awareness-raising activities were designed to educate local households about energy-efficient fans and our project. These activities were facilitated and supported by Village Organizations (VOs). After the training session, SHG members disseminated information about our project at local SHG meetings and via door-to-door campaigns. Information campaigns included pamphlets, posters, and demonstration fans. All potential participants were informed about the standard warranty support provided by the manufacturer. As noted above, this warranty support can be hard to access from remorse markets. In the villages that had been assigned to our warranty treatment group, SHG members educated potential participants about the additional local warranty support. This three-month warranty could be readily activated through the local shop. Local shops were equipped with surplus inventory such that any technical problems that arose within the three-month period could be immediately replaced.

Demonstration Activity: This activity took place at a village or CLF office where a sample BLDC fan is installed so that people can see it operating (and cool off on a hot day!). The purpose of this information session was to provide additional information on BLDC fans, re-explain our initiative, and demonstrate the demand elicitation exercise we will use to elicit willingness to pay and randomly assign a purchase price during a sales appointment. The activities demonstration was conducted by the Local Resource Persons (LRPs) identified by the JEEViKA & J-WIRES at local level. Meeting location and time was announced well in advance.

Enrollment: After the mock game demonstration, attendees had the opportunity to apply to participate in the study. A tablet-based enrollment survey was conducted with all interested participants. Priority was given to those respondents who indicated that they were very likely to purchase a ceiling fan in the next year and willing to travel to a participating shop for a sales appointment. Research staff explained that participants would need to bring the funds to purchase the fan to the sales appointment. Interested and qualified participants made sales appointments and shared contact information so they could be reminded/contacted about the appointment.

Final Survey Activity: The final survey will be conducted at a participating SHG shop. The surveys are conducted by the research staff who attend all sales appointments. One day prior to the appointment, the Local Resource Person (LRP) contacts the participant to ensure their availability on the day of WTP Game Session. If the participant is available for the session, the LRP reminds the participant of the appointment location and asks them to bring electricity bill and funds to purchase the fan. If the participant is not available, but still wanting to participate, the appointment is rescheduled. IF the participant is no longer willing to participate, the appointment is canceled
On the day of the appointment:

As per the Covid precautionary guidelines, the LRP asks about COVID symptoms. If the participant has covid symptoms the participant is asked to return home and reschedule when in good health.

COVID guidelines and consent forms are explained. The consent form reminded participants of the manufacturers warranty, using manufacturers language regarding the online portal. For the treatment group reminded participants about the local warranty offer "Our project provides additional warranty support for the first three months of ownership. If anything goes wrong with the fan within the first three months of operation, the fan may be returned to this store and the JWIRES organization will be responsible for processing the product return and replacement.".

Upon confirming consent, staff asks participants to show their electricity bill (and requests permission to photograph). The researcher, with the help of the shop owner, conduct the survey. This includes a demonstration game where a “mock” BDM game is played. The participant has an opportunity to ask questions and repeat the practice game if desired. Once the rules of the game are clear, the participant indicates her/his maximum willingness to pay for the efficient BLDC fan. He/she then receives her/his assigned scratch card - which has been pre-assigned using the participant’s name and id number. The bid amount is written on the card. The researcher takes a photo and uploads immediately. The participant picks a box on the scratch card and scratches off to reveal his/her purchase price. A second photo is taken and uploaded immediately. If the Scratch card shows the same or less price than the price quoted by the participant, then he/she is the “Winner” of the game. If the Scratch card shows more price than the price quoted by the participant, then he/she loses the game. The participant is invited to scratch off all prices on the card so he/she is assured this is a fair lottery.

Researchers ask concluding questions and the survey concludes. Shop owner follows up with winning participants regarding fan installation. The study location in-charge installs the EE fan at the participant’s house and record the date in the record book under “Fan Game Register”.

Randomization Method
Fan purchase price/subsidy randomization was done using scratch cards. Participants scratched off a purchase price after stating their willingness to pay for a fan.

Local warranty support was randomly assigned across clusters.
Randomization Unit
Fan purchase price was randomized across individuals.
Local warranty support was randomly assigned across village clusters/solar shops.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
N/A
Sample size: planned number of observations
~1500 households 8 solar shops
Sample size (or number of clusters) by treatment arms
The distribution of BDM prices was designed to fairly allocate prices across participants. There were 13 distinct price points. In expectation, we should have 115 participants assigned to each price point. The actual assignment will depend on which scratch card cells participants ultimately choose.
Warranty support treatment is assigned to 4 randomly selected shops. The other 4 shops serve as controls.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
To estimate how a change in the offer price impacts demand for energy efficient fans, we will be comparing adoption rates across experimental groups who received different price offers. In expectation, 115 participants will be assigned to each price point. For power purposes, we can aggregate price points once we learn (a) how many participants are allocated to each price point and (b) the baseline take-up at the highest purchase price (Rs 2390) which is close to the current procurement price and almost certainly exceeds future procurement prices. We are well-powered (using the standard threshold of 0.8) to detect an increase of 10% across groups of 250 if the adoption rates at the procurement price are low (this assumes a one-sided test, alpha =0.05). At higher baseline adoption rates (e.g. 30%), we will need to aggregate more price points. We will also be interested in the interactions between our interventions. Before knowing what baseline adoption rates look like, it is difficult to predict whether we will be able to estimate these interactions with precision.
IRB

Institutional Review Boards (IRBs)

IRB Name
UC Berkeley Committee for the Protection of Human Subjects
IRB Approval Date
2019-03-07
IRB Approval Number
046332-002

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials