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Eliciting and utilizing willingness-to-pay: evidence from field trials in northern Ghana

Berry, James, Fischer, Gregory and Guiteras, Raymond (2020) Eliciting and utilizing willingness-to-pay: evidence from field trials in northern Ghana. Journal of Political Economy, 128 (4). 1436 - 1473. ISSN 0022-3808

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Identification Number: 10.1086/705374

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 house-holds’ 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.

Item Type: Article
Official URL: https://www.journals.uchicago.edu/toc/jpe/current
Additional Information: © 2020 The University of Chicago
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments
D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L31 - Nonprofit Institutions; NGOs
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q51 - Valuation of Environmental Effects
Date Deposited: 08 Mar 2019 14:30
Last Modified: 29 Jun 2020 23:24
URI: http://eprints.lse.ac.uk/id/eprint/100236

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