Financial benefit of the biomass cookstove and the importance of individuals’ behavior

In a previous post, I discussed the potential health benefits for women and children associated with the use of biomass cookstove. Today I would like to talk about another potential benefit for the biomass cookstove users: financial savings. Specifically, I will talk about the discrepancy between the theoretical impact of the improved cookstoves on household expenditure and what actually happens in practice.  

Let’s start with the theory of change that can explain the financial benefit of the biomass cookstove. As I said before, many families in rural Indonesia use three stone fire as their cooking method. However, a lot of families are using kerosene cookstoves too (96% of the families that we visited in Kupang, 54% in Soe and 52% in Kefa). Besides being unhealthy, this cooking method is expensive. A liter of kerosene costs around 5,000 Indonesian rupiees (0.39 dollars) and the average kerosene consumption per week is 5.61 L in Kupang, 2.91 L in Soe and 4.36 L in Kefa. Because biomass cookstoves do not require kerosene and they only need firewood, which can be collected for free, biomass cookstoves have the potential of significantly reducing household expenditure.  

While in theory the biomass cookstove can reduce household expenditure, in practice, financial benefits are less than expected. In order to understand this difference between the theory and what actually happens in the field, it is important to highlight one of the results of our research: most people use multiple cooking methods, not only one. Specifically, 55% of those we interviewed use two or more cooking methods. In the same way, biomass cookstove users combined this cookstove with other methods. In this context, where there is no full transition to biomass cookstove, it makes sense that the benefits of the cookstove are less than expected.

So let’s discuss the actual financial savings experienced by people who use the cookstove. When using the improved cookstove, users reduce their kerosene consumption for cooking by 41%, from approximately 25,000 rupiees per week to 10,000[1]. This benefit is realized most by users who are able to collect firewood. However, when users have to buy wood to use the cookstove, it seems that there is no income saving.

What is interesting is that a rigorous impact evaluation of improved cookstoves in India by a HKS professor (Hanna, Duflo and Greenstone, 2012) found a similar result: “treatment households that received the improved stoves still continued to use their traditional stoves in conjunction with the new ones” and, consequently, “the treatment did not affect fuel costs”.

These two pieces of evidence show that the impact of technologies in the real-world can be really different from their effect under laboratory conditions. It is clear that individuals’ behavior influences social programs’ effectiveness and, consequently, this behavior should be taken into account when designing public policies.    

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[1] This result does not come from an experimental evaluation and the sample size is small.