Determinants of willingness to pay for briquettes in Uganda

Abstract

This study, conducted in Kampala, Uganda, aimed to determine the willingness of briquette users to pay for this alternative energy source. The overall objective was achieved through three specific objectives: characterizing different energy sources, estimating consumer willingness to pay for briquettes, and determining the influencing factors. The research was carried out in the five divisions of Kampala Capital City Authority; Makindye, Kawempe, Rubaga, Nakawa and Kampala central. The study population comprised of energy users comprising of household consumers, institutions and business ventures from each division. The study area was purposively selected because of heavy reliance on biomass energy especially for cooking. A total of 200 respondents were sampled. In each of the five divisions of Kampala data collection was conducted in four wards which were randomly selected. From each ward one village/zone was also randomly selected and from each villages/zones, 10 respondents were randomly sampled from the different households and interviewed. Methods employed for data collection included structured questionnaires and individual one-on-one interviews. The study revealed significant findings regarding the determinants of consumer willingness to pay for briquettes. Key influencing factors identified were age, profession, monthly income, briquette type (specifically carbonized), and the current use of wood or charcoal as the primary source of fuel. To achieve objective one descriptive statistics were computed. These included means, standard deviations, percentages and frequencies and F statistics. Objectives 2& 3 were achieved using double bounded dichotomous choice contingent valuation for willingness to pay models. The ordered probit model was used to analyze objective three. Estimates of the parameters of this model was by maximum likelihood estimation. The findings indicated that younger individuals demonstrated a higher willingness to pay for briquettes, suggesting a potential generational preference for cleaner energy sources. Professionals were also more inclined to adopt briquettes, possibly due to higher income levels, environmental awareness, or convenience. Monthly income was identified as a crucial determinant, with higher income levels positively correlating with increased willingness to pay. Moreover, the type of briquette used influenced consumer preferences, with carbonized briquette users exhibiting a higher willingness to pay. The study also found that consumers currently relying on wood or charcoal as their main fuel sources were more receptive to adopting briquettes. In conclusion, the study provides valuable insights into the socio-economic and demographic factors shaping consumer willingness to pay for briquettes in Kampala. The identified determinants offer strategic implications for targeted marketing, income-sensitive pricing strategies, and policy recommendations to promote the widespread adoption of briquettes as a sustainable energy alternative in Uganda.