Conference Agenda

Why do profitable, socially beneficial technologies remain underadopted among firms in developing countries? I study this question through a randomized controlled trial with urban restaurants, a major consumer of biomass fuels. The experiment tested whether tailored, picture‑based information on environmental harms and private cost savings increases willingness to pay (WTP) for solar water heaters that replace charcoal‑fired boilers, eliciting WTP under upfront payment and under credit with monthly, weekly, and daily repayment schedules. Information had no effect: even with the most flexible repayment terms, average WTP was only 25 percent of market price. Detailed energy data show high private fuel expenditures and substantial pollution externalities; a social cost–benefit calculation implies that benefits exceed costs more than a hundred-fold, with private payback in under two years. Patterns in WTP across credit schedules indicate that liquidity constraints interact with behavioral frictions, rendering information and payment flexibility insufficient. The results reveal a large wedge between private and social returns and inform the design of Pigouvian subsidies and complementary financial instruments to induce socially efficient technology adoption.