Demand Estimation with Strategic Complementarities: Sanitation in Bangladesh
James A Levinsohn and
Ahmed Mobarak ()
No 13498, CEPR Discussion Papers from C.E.P.R. Discussion Papers
For many products, the utility of adoption depends on the share of other households that adopt. We estimate a structural model of demand that allows for these inter-dependencies. We apply our model to the adoption of household latrines - a technology that has large consequences for public health. We estimate the model using data from a large-scale experiment covering over 18,000 households in 380 communities in rural Bangladesh, where we randomly assigned incentives to purchase latrines. Subsidies were randomly assigned at the household level to identify the direct effect of price, and subsidy saturation was randomly varied at the community level to identify strategic complementarities in demand. We conduct counter-factual simulations to analyze the policymaker's tradeoffs along price, saturation and scope margins: To raise aggregate latrine adoption, is it better to intensely subsidize a few, or widely disperse subsidies across households or communities? We also analyze the effects of targeting subsidies on the basis of household poverty, social position, or neighborhood population density. Finally, we use additional experiments to explore mechanisms underlying the complementarity in demand, and find that shame and changing social norms are driving factors.
New Economics Papers: this item is included in nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at email@example.com
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:13498
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=13498
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().