Journal of Political Economy Vol. 128 No. 4 2020
Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana
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 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.
- DOI
- 10.1086/705374
- Volume
- 128
- Issue
- 4
- Pages
- 1436-1473
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref