Does Income affect the choice of Hot Water Systems per se?

It is devilishly difficult to know whether statements made by respondents regarding income are accurate, since there is a powerful psychological inclination to strategically over- or under-report income, depending on the perceived advantages to be gained thereby. For this reason many researchers mis-trust Stated Preference information (SP --what the people say about themselves) in micro-economic surveys and prefer Revealed Preference information (RP -- to quote Dragnet,"Nothin' but the facts, ma'am"). Nonetheless, it is important to know what people say about how they behave (because at the end of the day, how they perceive the world is the arbiter of their choices), and then try to use triangulation (see Jicks) to see if SP and RP information can inform each other.

People may be lying to researchers, and they may be lying to themselves, but when doing household surveys, as we have done, one can always ask.

So we did.


10.4 Did a lack of constant monthly income affect your choice of the water heating
system you use?

10.4.1 Yes
10.4.2 No
10.4.3 Other

The answers:

Zabaleen: Yes 184/225 (81.8%), No 41/225 (18.2 %)

Darb El Ahmar: Yes 107/230 (47%), No 123/230 (53%)

The results do not necessarily mean that those saying their poverty had no affect are also saying that income provides no constraints. In focus group discussions in Darb Al Ahmar, where more than half the households said "No" many respondents said that they would answer that income did not affect their choices because they didn't see what other palatable choice they had -- they had a bathroom with plumbing ready to put in a hot water system, literally built to accept either a gas or electric heater, usually biased toward an electric heater because of the presence of an electric outlet next to the installation point for the heater (there is no provision of natural gas pipes in the Darb El Ahmar neighborhood). The cost of heaters can be as low as 100 LE (for uninsulated galvanized tanks with heating elements sold on the street near Gumhuriya street), and averages 400 LE (for factory made units from licensed stores); this is within the budget of most families.

Others may be able to afford hot water heaters, but still say that lack of income influenced their choice to underscore their relative poverty. A small factory owner in the Zabaleen community had two bathrooms and two hot water heaters in his house -- an electric and a gas heater. He said that he got the gas heater because the electric one, while it cost less to install, cost more to operate. He left the electric heater unplugged and urged his family to use the gas heater. Though he is considered "wealthy" by his neighbors, who have only one bathroom and no heater, he claimed that lack of income influenced his choices and said, "if I had known that electricity would cost so much, I would have started out with gas".

The purchase price of Heaters themselves are advertised heavily, but there is little consumer awareness of the operational costs.

The Electricity price for heating water is bundled in with the cost of running refrigerators, fans, lights and televisions. Very few people understand the concept of kilowatt hours, or are aware of the relative current draw of various appliances, though they suspect that water heaters consume a lot more than their lights.

Gas prices for heating water are bundled in with the cost of using the stove for cooking, so unless a family uses a separate gas bottle for cooking and a separate bottle for heating water, it is hard to unpack this information.

Nonetheless, those families that use hot water only in the winter were able to approximate the difference between the seasonal costs, and this gives some yardstick.

To get an idea of what people thought they were paying for hot water, we asked them to estimate.

I will first present here the aggregate data, without regard to people who have seasonal use, and will then consider the data from those who only use hot water in the winter to see the variance.

Zabaleen average estimated cost for heating water (n = 225): 19.43 LE (Max = 150, Min = 0)
Darb Al Ahmar (n = 224): 19.60 LE (Max = 65, Min = 3)

Interestingly, though these two communities differ rather remarkably in the proportion of the types of heating systems and fuels they use, the average estimates are the almost exactly the same. This is despite the presence in the data of a few outliers (Mina's shanty that burns garbage in a Kanoun campire pays 0 LE each month, while Imad Samir Sadqy, who uses an electric heater, with 8 members of the family using hot water -- 5 of them between 10 and 20 years old -- (record ST39) pays 150 LE).

HEATING BY ELECTRICITY:

The Zabaleen average estimated running costs for heating water by electricity (n= 64) was 26.62 LE (Max = 150, Min = 5)

The Darb Al Ahmar average estimated running costs for heating water by electricity (n = 126 ) was 21.06 LE (Max = 65, Min = 3.5)

In both cases, electric heating contained the maximum values.

HEATING BY GAS:

The Zabaleen average estimated running costs for heating water by gas appliance (n= 16) was 17.35 LE (Max = 35, Min = 6)

The Darb Al Ahmar average estimated running costs for heating water by gas (n = 45 ) was 19.48 LE, close to the aggregate average (Max = 40, Min = 5)

HEATING BY KITCHEN STOVE ON BUTAGAS

The Zabaleen average estimated running costs for heating water on a kitchen stove run by butagas (n = 48 ) was 14.83 LE (Max = 45 Min = 3).

Note, however that the Maximum value exceeds that of using a gas appliance heater (40 LE per month).


The Darb Al Ahmar average estimated running costs for heating water on a kitchen stove run by butagas (n = 105 ) was 17.24 LE (Max = 100 Min = 2).

Note, however that the Maximum value not only exceeds that of using a gas appliance heater (35 LE in the case of the Zabaleen sample) but is the same as the second highest value for electric heater use (100 LE per month).

HEATING ON A ONE-EYE PORTABLE BUTAGAS HEATER

In the Zabaleen sample (n= 10) the average estimated cost of heating water on a one-eye portable butagas bottle was 16.3 LE (Max = 30, min = 5).

In the Darb El Ahmar sample (n = 2) the average estimated cost of heating water on a one-eye portable butagas bottle was 18 LE (Max = 20, min = 16)

HEATING USING A KEROSENE BABUR

In the Zabaleen sample (n = 3) the average estimated cost of heating water on a kerosene babur was 12.33 LE (Max = 18, min = 5)

In the Darb El Ahmar sample (n = 8) the average estimated cost of heating water on a kerosene babur was 28.14 LE (Max = 50, min = 7)


HEATING ON A HAMIL USING BUTAGAS

In the Zabaleen sample (n = 26) the average estimated cost of heating water on a butagas bottle supplied Hamil was 16.73 LE (Max = 30, min = 5)

In the Darb El Ahmar sample (n = 1) the average estimated cost of heating water on a butagas supplied Hamil was 20 LE (here, since there is only one sample, of course the Max and the Min are the same, 20 LE)

The one case in Darb Al Ahmar where the family used the washing machine for hot water they were unable to estimate their monthly costs, while in the one case in our sample from the Zabaleen where the family used a campfire, the running costs were zero.

NOTE:

None of this data has been corrected yet for family size to get a rough estimate of how much hot water costs per capita when heated using these different systems so it is premature to draw any conclusions about the relative running costs of these technologies!!

Since it is well after midnight, however, I will do that analysis in the morning, and we shall see if Whittington's observation that the poor pay more, and that inferior technologies often cost more in the long run, applies to our special case.

I have a hunch, though, about one of the real predictors in this data set: It may turn out that the most significant factor affecting hot water heater choices is not perception of the capital or running costs of the system but rather how well prepared the bathroom is for the installation of a given system. It may very well be that hot water system choices are more constrained by the infrastructural availability of complementary goods than anything inherent in the costs of the systems themselves. If this is the case, than the hot water systems available to the poor in this area may really be substitute goods.

That is... with the exception of solar hot water systems, whose initial purchase price (and construction price when self-built) is so incommensurately out of range with that of the available alternatives, regardless of the near zero running costs, that it is inconceivable for anybody to switch without major subsidy and support!

We shall see!