Monday, July 21, 2008

Fistful of dollars... for lumens?

Light is one of those "things" that some of us are able to take for granted. The 1960's Supreme Court Justice Stewart Potter's observation about obscenity fits well, I know it when I see it. We may not really understand the duality of light. Is it a wave or a particle? But, we do know how much it costs to keep the lights on right? Well what does it cost to run the light at your desk right now. Let's just think about it. Figure it is a 100 Watt bulb and you pay $0.12/kWh (typical here in San Francisco). So, that means in one hour you would use 100 W hours or (0.100 kWh). Therefore, I spent a bit more than a penny while I typed out this post. Luckily, we live in a world where 1.2 cents is well below my threshold to care. I mean, I care but...

Now, picture your desk is in a quaint house in Tanzania. There is no electricity to run the lamp. So, we have a wick Kerosene lantern. Turns out that that most of the energy is converted to heat rather than light with this type of lantern. It is about 170 times more lumens for the incandescent light for the San Francisco desk lamp than the Tanzania. So, we need to burn a lot more Kerosene to get the same lighting effect. In fact, the lamp would have to burn more than 1.6 liters of Kerosene. That's nearly $2.30! That's 190 times what it costs to get the same amount of light here in California. Remember that burning Kerosene is dangerous and bad for your health. Oh, and in Tanzania we only make around $5 a day. That means we paid more actual dollars (if we had them) for a worse product that could eventually kill us. This is definitely above our threshold to care.

There is an actual premium being paid because they are poor. This "poverty premium" was made famous by C.K. Prahalad's Fortune at the Bottom of the Pyramid. Poverty premium gives dissigno two benefits. First, there is a lot of room to help make things better. Second, there is real economic potential for business. These "base of the pyramid" consumers are spending dollar for dollar (if not more) as their San Francisco counterparts. Companies that can reach these people can improve their quality of life and truly make a profit.

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