[Stoves] Stove costs

[Cecil Cook]

Dear Crispin and Jan,

 

Here are three partial unpublished reports and one aggregate table that I
put together for GTZ as a valiant effort by an anthropologist to to turn a
small sample of face to face interviews into a meaningfully differentiated
model of the charcoal stove economy of Lusaka.  

 

Maybe it will illuminate some of the proverbial and continuing difficulties
encountered by 'expensive' improved stoves to gain and hold on to a
significant share of a local stove market that is dominated by crappy but
very low cost stoves made by artisans.  

 

The TV and cell phone examples given by Crispin do not 'ring' completely
true for the bottom 2/3rds of the Lusaka charcoal stove market because there
poor people buy the best lowest cost phones and TV's that are on the market.
So the principle is the same: poor people purchase the lowest cost stove
technology on the market. Yes, it is possible for them by heroic feats of
self denial to save enough money to purchase a $25 to $50 cell phone or even
a more expensive TV, but if there was a cell phone or a TV on the market
that cost less and still functioned adequately they would surely buy the
lowest cost technology that gets the job done.  

 

What I discovered and tried to establish in this study was that low income
people who live and die according to how well they manage their daily cash
flows can as a rule only manage to save about 20% of their daily cash flow
over a 7 day period so the amount of money a household can save in a week
pretty determines the upper limit of how much they are willing/able to spend
to buy the least expensive functional charcoal stove on the market.  

 

In search,

 

Cecil Cook

TechnoShare (SA)  

On Fri, Nov 18, 2011 at 11:55 PM, Crispin Pemberton-Pigott
<crispinpigott at gmail.com> wrote:

Dear Jan



I am picking up on the past comment you made: "For people living on $2 a day
or less, what for example would be considered a low cost stove?  Middling?
High?"



I am copying this to Cecil Cook who is a social anthropologist specializing
in stoves and their use. You can contact him directly if he does not respond
to this group (to which he is not subscribed).



The $2 per day person is usually not someone living on a total income of $2
per day as a salary from which they must pay for everything. Yes there are
such people, however that is not really representative of total income or
one could say, value of all income including in-kind receipts.  For example
fuel collected free from the environment without expense has a value and
from a marketing point of view, an opportunity cost.



With that in mind, one can more easily understand how people with "$2 per
day" income have cell phones and TV's. There are a number of ways you could
slice it: disposable income, extended family total income including
environmental contributions and so on.



Cecil has found that the maximum amount a stove can cost, i.e. to be bought
at all by anyone in the target group, is dependent on cultural
considerations. A way to think about it is like this: how much money will
accumulate in the pocket of a person 'saving for a stove' (or other major
purchase) before it 'grows holes' and leaks out? I will give his example of
Lusaka where the amount is 10 day's income. No one in the main target
population saves more than 10 day's income before something else starts
eating it. It may be a relative's school fees, needed clothing and so on.
Anything. That is the upper limit of a practical stove's cost.



The upper limit for a voluntary purchase near the 'usual cost' is also
important. Asking people not how much they are willing to pay for 'anything'
max, but how much they are willing to pay for a stove will generate a
different answer. If it saves fuel and cooks as well and has less smoke and
(especially) lights quickly and cleanly, people will usually say they will
pay more than the standard product. In the case of Lusaka, the standard
stove goes for about $1.50. An improved stove that will save fuel can sell
for $2.50 to $3.00. Stoves that cost more than that will sell poorly because
it is above the tolerance range for 'stoves' even though it is well under
the maximum they could save.



If a stove has wonderful features so attractive that people will pay
'anything to get one', it will bump into the upper limit of what most people
can save before it starts leaking out of the pocket.



For many years stoves costing $10 to $15 have failed to thrive in Lusaka.
That is below the 10 limit but far above the $2.50 limit. In a different
culture, with a different fuel price (fuel in Lusaka is pretty cheap) with a
different pay method/cycle there will be different numbers involved but the
same principles.



You may find his discoveries helpful when analyzing your cost-benefit
scenarios.



Regards

Crispin




 

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