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

James Berry, Greg Fischer and Raymond Guiteras

Journal of Political Economy, 2020, vol. 128, issue 4, 1436 - 1473

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 households’ 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.

Date: 2020
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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 (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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