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<body bgcolor="#FFFFFF" text="#000000">Dear Paul<br/><br/>Poor people who buy fuel often pay about 20-25% of their income for energy. above 25-30% they switch fuels. <br/><br/>That is the number/value to watch, not so much the concept of disposable income. If a stove will save its own cost people will consider it. Access to the stove (payments etc) then becomes the issue, not the absolute cost. <br/><br/>These issues have been explored pretty well for years. You point out that transport and ceramics are significant costs. True, but there are economics of scale to win with there too. I can land a Swazi stove in Kigali Rwanda for less than the cost of VAT in South Africa so it is cheaper in Kigali than 400 km away in JHB. Transport in bulk is cheap. The last mile can be expensive. <br/><br/>Mass produced (and very good) ceramics and glass can be very cheap. Regarding those spending a week's wages on a stove (more like 3 days) : think about the cost of a pot. I was recently in Jogjakarta and asked a group of women why they thought it was reasonable to expect to pay Rs540,000 for three pots (woks with lids) and only Rs150,000 for a good stove to cook them on (about $54 and $15 respectively). They were surprised by the comparison and had not considered it directly before. The answer was that the pots were bought at the market and they had no control over the price but they could always make an open fire or traditional clay 3-pot stove themselves. <br/><br/>An important part of the attitude was the durability of the product. Stoves are not considered to last 'forever' whereas pots are. <br/>In closing Cecil Cool found that the upper limit of a stove cost was related to the ability to save cash before something started to dip into the pile. That value in Lusaka was 10 day's wages. The willingness to pay for a stove however stopped at $2.50. <br/>Regards<br/>Crispin<hr/><div><b>From: </b> Paul Anderson <psanders@ilstu.edu>
</div><div><b>Date: </b>Fri, 09 Nov 2012 07:52:53 -0600</div><div><b>To: </b>Discussion of biomass cooking stoves<stoves@lists.bioenergylists.org></div><div><b>Cc: </b>Crispin P-P<crispinpigott@gmail.com></div><div><b>Subject: </b>Re: [Stoves] Cost of stoves</div><div><br/></div>
<div class="moz-cite-prefix">Dear David and Crispin,<br>
<br>
And where the wages are less than $100 per month (and some of that
money is for a reasonable meal during the work day), the labor
component is almost negligible compared to the costs of new (not
scrap) sheet metal.<br>
<br>
When the stove is ceramic/fired clay, the clay can be cheap but
there are the costs of firing it and then transporting it. So
the labor still adds only a relatively low amount to the stove.<br>
<br>
Can these low-income workers (yes, they have a job and they are
better off than those without any work) afford a $25 stove? That
would be a week of wages.<br>
<br>
Would any of us who live in the affluent societies pay one week of
wages for a stove? That might depend on your income!!! And we
have discretionary money far above the money needed for food and
lodging.<br>
<br>
Paul<br>
<pre class="moz-signature" cols="72">Paul S. Anderson, PhD aka "Dr TLUD"
Email: <a class="moz-txt-link-abbreviated" href="mailto:psanders@ilstu.edu">psanders@ilstu.edu</a> Skype: paultlud Phone: +1-309-452-7072
Website: <a class="moz-txt-link-abbreviated" href="http://www.drtlud.com">www.drtlud.com</a></pre>
On 11/9/2012 2:09 AM, Crispin P-P wrote:<br>
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Dear David
<div><br>
</div>
<div>Typical worker wages in many poor countries are $200-300 a
month. Informal sector pays less. Industrial production would
make a single pot metal stove in 8-10 minutes including boxing. <br>
<br>
Labour is thus an insignificant cost, it is material that is the
major expense. </div>
<div><br>
</div>
<div>In volume you can assume materials to be about 2/3 the
marginal cost of production and the retail price to be between 2
and 6 times the marginal cost. Labour-intensive production can
be very good if they have exactly the right tools (which is
often not the case.).</div>
<div><br>
</div>
<div>Anything you buy in North America at a store sells for about
10 times the marginal production cost, just to give you an idea
what consumer societies pay.</div>
<div><br>
</div>
<div>Regards </div>
<div>Crispin </div>
<div><br>
</div>
<div> I notices a post here, where a facility employing 6-10
people coulf produce 500 stoves per month. This means that each
person can produce 50-80 stoves per month. Assuming a 40 hour
work week (which may be too low), that means 170 hours per month
or 2-3.5 hours per stove. Assuming normal G&A expense,
(things like cost of the building and tools) and some component
cost for the stove (sheet metal costs money), would the stove
not cost over 2-3.5 hours of a worker's time? What does this
say about the cost of a stove?<br>
<br>
If a stove must sell for $X, does this imply the worker's income
must be well below $X/2 per hour since there are G&A and
material costs involved?<br>
<br>
If my analysis is incorrect, please tell me how the business can
survive with less income than expenses. Can the worker survive
with less income than it costs him to survive?<br>
<br>
Dave 8{) </div>
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