Second, after the information provision experiment, in each room we elicited WTP using the BDM bidding method. Before respondents stated their maximum WTP for the solar lantern, we informed them about the decision mechanism underlying the BDM bidding method. Participants were told the range of prices used (i.e., the minimum and the maximum) in the experiment and then were asked individually to bid a price for the solar lantern by stating their maximum willingness to pay. At the end, both groups (treatment and control) were gathered in one place and a random price was selected from a bucket containing a range of uniformly distributed prices. The prices ranged from 20 birr to 250 birr with an interval of 10 birr between each price.<sup>3</sup> The highest price, 250 birr, was 5 birr higher than the market price of the solar lantern at the time of the survey. All prices except the highest price reflected a subsidy relative to the market price, but the fact that the price list included a subsidy was not announced to the participants. The purchasers of the solar lantern would pay the randomly drawn price, not their WTP.

Under the above procedures, it would be in the best interest of the participants to bid according to their actual valuation of the solar lantern. This was explained to the respondents until we made sure it was understood. If a respondent’s stated WTP was below their actual WTP and a price higher than their stated WTP but not more than their actual WTP was drawn, they would not be allowed to buy the solar lantern, even if they wanted to buy it at this randomly drawn price. On the other hand, if their stated WTP was higher than their actual WTP and the randomly drawn price was higher than their actual WTP and not more than their stated WTP, they would be expected to buy the solar lantern even if they did not want to. Neither of these outcomes is in the best interest of the respondent. Individuals were also informed that if their stated willingness to pay was greater than or equal to the randomly drawn price, they would be given the opportunity to purchase the solar lantern at the randomly drawn price. Payment could be made immediately or after about a month. In cases where a household decided to purchase the solar lantern immediately, the household paid and received the solar lantern immediately.

> 3 The exchange rate at the time of the survey was 1 USD = 28 birr. This implies that the range of 20 to 250 birr is about 0.7 to 8.9 USD. The price interval of 10 birr (about 36 US cents) is quite small. The 10 birr interval was chosen because respondents’ WTP was expected to typically be in multiples of 10. This is also confirmed by the distribution of WTP data we collected from this study, in which all respondents provided their responses in multiples of 10, except 7 of the 808 respondents, whose WTP was in multiples of 5. We also note that, while the maximum price of 250 in the range is more or less the same as the market price of the solar lantern, the minimum price of 20 birr was chosen with the expectation that households may typically have a WTP of 20 or more; this is also confirmed by the results of the study, which show that only 5 of the 808 respondents had WTP of less than 20.

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