This paper simulates the real household expenditure effects of electricity price increases in Zambia. First, we find that electricity subsidies are highly regressive. Second, our partial equilibrium model simulations of the welfare effects of electricity tariff rises show that poorer households suffer larger percentage losses in real expenditures compared to wealthier households. Naturally, this leads to increases in poverty. We find that removing electricity subsidies and transferring the realised fiscal savings to social cash transfers reduces extreme poverty significantly.
We use a series of credit and insurance simulation games to test the role of access to credit and insurance on magnitude and timing of farm technology uptake with small-scale farmers in South Africa. Using Cumulative Prospect Theory, we assess how insurance impacts technology uptake given risk preferences. Our findings suggest that risk aversion is linked to lower uptake of the insured technology. while loss averse farmers are more likely to adopt technology bundled with insurance. Higher weighting of small probability events leads to later uptake of the uninsured technology option.