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

James Berry, Greg Fischer and Raymond Guiteras

STICERD - Economic Organisation and Public Policy Discussion Papers Series from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE

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: price mechanism; heterogeneous treatment effects; health behaviour; Becker-DeGroot-Marschak; field experiments (search for similar items in EconPapers)
JEL-codes: C26 C93 D12 L11 L31 O12 Q51 (search for similar items in EconPapers)
Date: 2018-05
New Economics Papers: this item is included in nep-exp and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://sticerd.lse.ac.uk/dps/eopp/eopp66.pdf (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 (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)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cep:stieop:066

Access Statistics for this paper

More papers in STICERD - Economic Organisation and Public Policy Discussion Papers Series from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE
Bibliographic data for series maintained by ().