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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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:	19 Dec 2024 00:35
URI:	http://eprints.lse.ac.uk/id/eprint/100236

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