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

By James Berry, G. Fischer, Raymond Guiteras. Journal of Political Economy, 2020

167 citations recorded by the source corpus.

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 households’ 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.

Subfields: Economics and Econometrics, Nutrition and Dietetics, Pediatrics, Perinatology and Child Health

View Paper: https://www.semanticscholar.org/paper/cb46e020c24c95f22dd49338ccb4044b1b94a229

Citations in the corpus

• Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China (2020, unknown): “Berry, Fischer, and Guiteras (2012) and Miller and Mobarak (2013) use RCTs to estimate WTP for water filters and cookstoves per se instead of WTP for improvements in environmental quality.”
• Demand for Off-Grid Solar Electricity: Experimental Evidence from Rwanda (2020, unknown): “See Berry et al. (2019) for a profound discussion of Becker-DeGroot-Marschak.”