Eliciting and Utilizing Willingness-to-Pay: Evidence from Field Trials in Northern Ghana

James Berry, Greg Fischer and Raymond Guiteras

No 273077, CEnREP Working Papers from North Carolina State University, Department of Agricultural and Resource Economics

Abstract: Using the Becker-DeGroot-Marschak (BDM) mechanism, we estimate the willingness-to-pay (WTP) for and impact of clean water technology through a field experiment in Ghana. Although WTP is low relative to the cost, demand is relatively inelastic at low prices. In the short-run, treatment effects are positive—the incidence of children’s diarrhea falls by one third—and consistent throughout the WTP distribution. After a year, usage has fallen, particularly for those with relatively low valuations. Strikingly, the long-run average treatment effect is negative for those with valuations below the median. Combining estimated treatment effects with individual willingness-to pay measures implies households’ valuations of health benefits are much smaller than those typically used by policymakers. Finally, we explore differences between BDM and take-it-or-leave-it valuations and make recommendations for effectively implementing BDM in the field.

Keywords: Community/Rural/Urban Development; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 56
Date: 2018-05-15
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https://ageconsearch.umn.edu/record/273077/files/WP-2018-016.pdf (application/pdf)
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Related works:
Working Paper: 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 (2015)
Working Paper: Eliciting and utilizing willingness to pay: evidence from field trials in Northern Ghana (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nccewp:273077

DOI: 10.22004/ag.econ.273077

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