Eliciting and utilizing willingness to pay: evidence from field trials in northern Ghana

James Berry, Gregory Fischer and Raymond Guiteras

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We use the Becker-DeGroot-Marschak (BDM) mechanism to estimate willingness to pay (WTP) for and heterogeneous impacts of clean water technology through a field experiment in Ghana. Although WTP is low relative to cost, demand is inelastic at low prices. Short-run treatment effects are positive throughout the WTP distribution. After 1 year, use and benefits are both increasing in WTP, with negative effects on low-WTP households. Combining estimated treatment effects with house-holds’ WTP implies valuations of health benefits much smaller than typically used by policy makers. We explore differences between BDM and take-it-or-leave-it valuations and make recommendations for implementing BDM in the field.

Keywords: price mechanism; heterogeneous treatment effects; health behavior; Becker- DeGroot-Marschak; field experiments (search for similar items in EconPapers)
JEL-codes: C93 D12 L11 L31 O12 Q51 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2020-04-01
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-exp, nep-hea and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

Published in Journal of Political Economy, 1, April, 2020, 128(4), pp. 1436 - 1473. ISSN: 0022-3808

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http://eprints.lse.ac.uk/100236/ Open access version. (application/pdf)

Related works:
Journal Article: Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana (2020)
Working Paper: Eliciting and Utilizing Willingness-to-Pay: Evidence from Field Trials in Northern Ghana (2018)
Working Paper: Eliciting and Utilizing Willingness-to-pay: Evidence from Field Trials in Northern Ghana (2018)
Working Paper: Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana (2015)
Working Paper: Eliciting and utilizing willingness to pay: evidence from field trials in Northern Ghana (2012)
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