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to energy conservation. For instance, the CFL program in Vietnam, in which a total of 1 million CFL bulbs were distributed at favorable prices, is estimated to have reduced peak demand by 31MW (ESMAP 2009).<sup>3</sup> This figure is calculated based on the wattage differentials between old and new lamps. There is similar discussion in the literature on other energy-efficiency goods and equipment, such as agricultural pumps (e.g., Garg et al. 2011).

6. From an economic point of view, however, these engineering calculations may overlook at least three important aspects related to the impact of a CFL bulb program. First, the distribution of new bulbs does not automatically lead to their actual use. People may or may not use them as expected. In Vietnam, the original assumption was that a 75W incandescent lamp would be replaced with a 20W CFL. However, many households replaced old CFLs with new CFLs. As a result, the impact on the peak power demand turned out to be smaller than the engineering estimate had anticipated (ESMAP 2009).

7. Second, engineering calculations cannot capture the distributional impact that the CFL program might have. Many CFL bulb distribution programs are implemented on a voluntary participation basis. Thus, it remains open to argument who the major beneficiaries ultimately are, and exactly how they benefit from these programs. Notably, the ways of using electricity vary significantly between the rich and the poor segments of the population. In developing countries, lighting is the most basic power demand among the poor. But the potential savings from CFL bulbs may not be as significant for the rich, who use electricity for many other purposes.

8. Finally, related to the above, people’s behavior can be changed by the energy efficiency program. On one hand, the CFL bulb distribution—either free of charge or at deep discounts—could raise awareness with respect to energy efficiency and global warming, motivating people to conserve more energy on other occasions. For example, the Brazilian temporary electrification rationalization is found to have had a long-term effect. The temporarily limited electricity supply encouraged customers to purchase more energyefficient home appliances, leading to long-term energy savings even after the supply constraint eased (Costa 2012). On the other hand, rebound or backfire effects may occur, as observed in many cases related to energy-efficient technologies. For instance, a more fuelefficient car may motivate people to actually drive more, not less.<sup>4</sup> 9. The current paper casts light on these issues by evaluating the energy-saving impact of a free CFL distribution program in Ethiopia. To remove possible self-selection bias, the fixed-effects model is applied for the panel data. To investigate the distributional impact, a two-step fixed-effects quantile regression (Canay 2011) is also used. The following sections are organized as follows: Section II briefly explains recent developments in the Ethiopian

> 3 The average wattage of the old lamps was 58W. These were replaced with 20W CFL bulbs. With a usage factor taken into account, it is estimated that 31MW of peak demand was reduced.

> 4 Evidence shows that the short- and long-term rebound effects of vehicle fuel efficiency are 4.5 percent and 22 percent, respectively (Small and van Dender 2007). The literature reports even larger rebound effects of about 50-60 percent (Frondel and Vance 2010; Frondel, Ritter, and Vance 2012). In a much broader context, the rebound effect for various GHG abatement actions is estimated at 34 percent in the UK (Druckman _et al_ . 2011).