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Ordeal Mechanisms, Information, and the Cost-Effectiveness of Subsidies: Evidence from Subsidized Eyeglasses in Rural China

Sean Sylvia, Xiaochen Ma, Yaojiang Shi, Scott Rozelle and C.-Y. Cynthia Lin Lawell ()

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Abstract: The cost-effectiveness of policies providing subsidized goods is often compromised by limited use of the goods provided. Through a randomized trial, we test two approaches to improve the cost-effectiveness of a program distributing free eyeglasses to myopic children in rural China. Requiring recipients to undergo an ordeal better targeted eyeglasses to those who used them without reducing usage relative to free delivery. An information campaign increased use when eyeglasses were freely delivered but not under an ordeal. Free delivery plus information was determined to be the most socially cost-effective approach and obtained the highest rate of eyeglass use.

New Economics Papers: this item is included in nep-cna and nep-tra
Date: 2018-12
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Handle: RePEc:arx:papers:1812.00383