Quality Unobserved: Can Information Provision Unlock Demand-Side Incentives for Upgrading in Low-income Countries?

Julia Cajal-Grossi, Lore Vandewalle and Christopher Woodruff

No 21142, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Can improving consumers' ability to discern quality increase demand-side incentives for quality provision? We conduct a framed field experiment in Uganda's furniture market, where quality dispersion is high but the price-quality gradient is flat. Nearly 900 prospective buyers ranked and priced tables spanning the quality distribution; a random subset received information on quality markers. At baseline, individual consumers perform worse than industry insiders at discerning quality. Information provision closes this gap: treated consumers' likelihood of correct rankings increases by 23 percentage points, and their price-quality gradient steepens significantly. Extrapolated market-wide, this would raise markups for top-quality producers by approximately 7.5%.

Keywords: Developing; countries (search for similar items in EconPapers)
JEL-codes: C93 D83 L15 O12 (search for similar items in EconPapers)
Date: 2026-02
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