Seminar
| Technology & Operations Management (TOM) Seminar
Serguei Netessine, Wharton, University of Pennsylvania
TOM Seminar: Inconvenience, Liquidity Constraints, and the Adoption of Off-Grid Lighting Solutions at the Bottom of the Pyramid - Serguei Netessine
Abstract:
A significant proportion of world's population does not have access to grid-based electricity, and so relies on off-grid lighting solutions. Rechargeable bulb technology is becoming prominent as an alternative off-grid lighting model in developing countries. In this paper, we explore the consumer behavior and the operational inefficiencies that result under this model. Specifically, we are interested in measuring the impact of inconvenience (of travel to recharge the bulb) which is a peculiar feature of this model, along with the impact of liquidity constraints on bulb usage. We analyze the efficacy of strategies that address these factors. We employ multiple methodologies: we first build a model of recharge decisions and theoretically explore its properties. To test (both ordinal and cardinal) predictions of this model, and to examine the performance of counterfactual strategies, we conduct field experiments in Rwanda in collaboration with a company that operates rechargeable bulbs business. Using our model as the data generating process, we then estimate its parameters by fitting it to the experimental data. Using the estimated model, we demonstrate that inconvenience-based strategies which are usually ignored by the firms and the policymakers tend to perform as well as, and sometimes better than price-based strategies in terms of improving the bulb usage. We also discuss the implications of our results for the off-grid firms and the policymakers and touch upon future work which involves studying impact of off-grid electricity on children education, gender equality issues and public health.
March
14, 2019
|
12:30pm -
2:00pm
| Baker Library | Bloomberg Center 103
| Faculty and doctoral students only
Organizer: Technology & Operations Management Unit
