Distribution of government residential utility stimulus in Ghana: evidence from the COVID-19 intervention

Abstract

In the wake of the COVID-19 pandemic, several countries resorted to various levels of lockdown as a panacea for the rampant spread of the virus. However, the imposed lockdown was not without economic challenges, particularly for the poor in developing countries. In response, the government of Ghana unveiled several free social support packages such as free water and electricity services. This study models the behaviour for or against free utility services and further investigates the drivers that explain an individual’s behaviour. Using a survey method and an ordered probit econometric technique, we find evidence that about 71 percent of respondents support free utility services, 14 percent are indifferent, and 15 percent also indicate their disapproval. Furthermore, an ordered probit regression analysis is used to show evidence that educated respondents with higher incomes are less likely to appreciate government-sponsored freebies. Other drivers of such behavioural differences for aggregated and disaggregated free social intervention utility services were further examined.

Impact statement

This study examined the reception of free water and a 50 percent electricity discount provided by the Ghanaian government during the COVID-19 pandemic. Utilising survey data and employing an ordered probit method, the research aimed to understand the factors influencing support or opposition towards free utility services. The findings reveal that approximately 71 percent of respondents preferred free utilities, while around 29 percent did not support the Ghana Residential Utility Stimulus implemented by the government. Among those opposed to the residential utility stimulus, a significant proportion were found to be educated individuals with higher incomes, as indicated by the ordered probit regression results. It is suggested that during emergencies like the COVID-19 pandemic, social assistance should be directed towards the impoverished and vulnerable segments of society.

Keywords:

• COVID-19
• government
• social intervention
• water
• electricity
• ordered probit

Reviewing Editor:

• Goodness Aye, University of Agriculture, Makurdi Benue State, Nigeria

Subjects:

• Psychological science
• social psychology
• economic psychology

Acknowledgments

The authors would like to thank the editor and anonymous reviewers for their supportive comments and suggestions.

Authors contribution

Benjamin Amoah: Conception of research idea, introduction, literature review, analysis, conclusion and recommendation, and review of paper.

Anthony Amoah: Conception of research idea, design of data collection tool, method, estimation of results, proof reading and review of paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

Data is available upon reasonable request.

Additional information

Notes on contributors

Benjamin Amoah

Benjamin Amaoh (PhD) He is a finance and banking expert from the Business School of the University of Ghana, Legon, Ghana.

Anthony Amoah

Anthony Amoah (PhD) He is an applied economist from the University of Environment and Sustainable Development, Somanya, Ghana.