Behavioural Biases Affecting Buying Behaviour of Kerosene Consumers for Alternate Fuels

• by Aishwarya Singh, Alekh Sanghera and Ritesh Rautela
• Feb 10, 2016
• 2 min
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MSC conducted an exploratory research that aimed to understand the enabling factors that might induce consumers to buy and use alternate fuels if direct benefit transfer is implemented.

The Government of India is considering replacing kerosene with Direct Benefit Transfers (DBTs)of cash into consumers’ bank accounts. Under the proposed DBT model, consumers will receive a lump sum credited in their bank account equivalent to the value of kerosene subsidy currently paid by the government. In addition to reducing leakages, the government expects that DBTs may encourage consumers to shift from kerosene to cleaner alternate fuels(AF), such as solar energy and electricity (or battery-operated lights), for both lighting and cooking. MicroSave conducted exploratory research to understand the ‘enabling factors’ that might induce consumers to buy and use alternate fuel(s) in the event of DBT. The research specifically looked at: “What will make kerosene consumers use DBTs to buy alternate fuel(s)?” This note explores the fuel(s) buying behaviour of different types of consumers, and what behavioural biases come into play when they buy fuel(s). The Government of India is considering replacing kerosene with Direct Benefit Transfers (DBTs)of cash into consumers’ bank accounts. Under the proposed DBT model, consumers will receive a lump sum credited in their bank account equivalent to the value of kerosene subsidy currently paid by the government. In addition to reducing leakages, the government expects that DBTs may encourage consumers to shift from kerosene to cleaner alternate fuels(AF), such as solar energy and electricity (or battery-operated lights), for both lighting and cooking. MicroSave conducted exploratory research to understand the ‘enabling factors’ that might induce consumers to buy and use alternate fuel(s) in the event of DBT. The research specifically looked at: “What will make kerosene consumers use DBTs to buy alternate fuel(s)?” This note explores the fuel(s) buying behaviour of different types of consumers, and what behavioural biases come into play when they buy fuel(s).