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Mobile phones, rent-to-own payments & water filters Evidence from Kenya

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  • Jill E. Luoto
  • David I. Levine

Abstract

Uptake of safe water products remains low, in spite of modest cost. We experimented with a sales offer that combined a free trial and rent-to-own payments for durable filters. Purchase rates doubled under this sales offer to 31% compared to a traditional lump-sum sales contract. To lower transaction costs we collected payments using Kenya's vast mobile banking network, MPESA. Mobile repayment rates were low; many filters were paid only when a vendor came in-person to request payment, which adds social pressure. While the rent-to-own offer is attractive, more work is needed to reduce transaction costs in rural and peri-urban Kenya.

Suggested Citation

  • Jill E. Luoto & David I. Levine, 2014. "Mobile phones, rent-to-own payments & water filters Evidence from Kenya," Working Papers WR-1039, RAND Corporation.
    • Handle: RePEc:ran:wpaper:wr-1039
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    References listed on IDEAS

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    1. Ignacio Mas, 2009. "The Economics of Branchless Banking," Innovations: Technology, Governance, Globalization, MIT Press, vol. 4(2), pages 57-75, April.
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    1. Michael Grimm & Luciane Lenz & Jörg Peters & Maximiliane Sievert, 2020. "Demand for Off-Grid Solar Electricity: Experimental Evidence from Rwanda," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(3), pages 417-454.
    2. Grimm, Michael & Luck, Nathalie, 2023. "Experimenting with a green ‘Green Revolution’. Evidence from a randomised controlled trial in Indonesia," Ecological Economics, Elsevier, vol. 205(C).
    3. Beltramo, Theresa & Blalock, Garrick & Levine, David I. & Simons, Andrew M., 2015. "The effect of marketing messages and payment over time on willingness to pay for fuel-efficient cookstoves," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 333-345.

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