The authors examine whether high personal discount rates help explain why and which households in developing countries under-invest in seemingly low-cost options to avert environmental health threats, including bednets, clean cooking fuels, individual household latrines, water treatment and handwashing. First, the authors elicit personal discount rates by combining a simple randomized experiment with detailed surveys of over 10,000 rural households in Maharashtra, India. Personal discount rates are lower for women, for better-off households, and for households who can access formal credit.

More than 3 billion people use wood fuels for their daily cooking needs, with detrimental health implications related to smoke emissions. Best practice global initiatives emphasize the dissemination of clean cooking stoves, but these are often expensive and suffer from interrupted supply chains that do not reach rural areas. This emphasis neglects that many households in the developing world cook outdoors. Our calculations suggest that for such households, the use of less expensive biomass cooking stoves can substantially reduce smoke exposure.

While much work has examined approaches to increase uptake of a variety of household environmental, health and energy technologies, researchers and policymakers alike have struggled to ensure long-term use. Drawing on a pilot-scale experiment conducted in rural Cambodia, this study evaluates whether economic incentives enhance continued use of—and fuel savings from—improved cookstoves (ICS).