Powering Livelihoods by Avoiding Household Damages: Household Willingness to Pay For Electricity Reliability in Sierra Leone

The authors estimate the marginal willingness to pay (WTP) for improved electricity service reliability in a nationally representative sample 1,047 grid or mini-grid connected households in Sierra Leone, using two complementary valuation approaches. Analyzing data from a discrete choice experiment, they find that, on average, households exhibit strong preferences for shorter outages; fewer daytime and evening outages, compared to nighttime outages; and prior notification, though there is heterogeneity in the relative weights ascribed to each of these attributes. Next, in a consumer damage function analysis, they estimate that damages are higher during long-duration and notified outages, particularly for daytime and evening events, compared to those occurring only at night or over multiple periods. Estimated marginal WTP for a one-hour reduction in outage duration ranges from 2.2 to 4.7 New Leones (~USD 0.10–0.22). The authors integrate findings from both approaches to derive policy-relevant insights on the value of reliability investments that reflect household preferences and reduce economic losses in a context that is characterized by very low-quality power.