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

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  • Gregory Fischer
  • James Berry
  • Raymond Guiteras
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    Abstract

    We utilize the Becker-DeGroot-Marschak (1964) mechanism to estimate the willingness to pay for clean drinking water technology in northern Ghana. The BDM mechanism has attractive properties for empirical research, allowing us to directly estimate demand, compute heterogeneous treatment effects, and study the screening and causal effects of prices with minor modifications to a standard field experiment setting. We demonstrate the implementation of BDM along these three dimensions, compare it to the standard take-it-or-leave it method for eliciting willingness to pay, and discuss practical issues for implementing the mechanism in true field settings.

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    File URL: http://eprints.lse.ac.uk/47913/
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    Bibliographic Info

    Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 47913.

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    Date of creation: 07 Apr 2012
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    Handle: RePEc:ehl:lserod:47913

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    1. Chassang, Sylvain & PadrĂ³ i Miquel, Gerard & Snowberg, Erik, 2010. "Selective Trials: A Principal-Agent Approach to Randomized Controlled Experiments," CEPR Discussion Papers 8003, C.E.P.R. Discussion Papers.
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    8. Nava Ashraf & James Berry & Jesse M. Shapiro, 2010. "Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia," American Economic Review, American Economic Association, vol. 100(5), pages 2383-2413, December.
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    Cited by:
    1. B. Kelsey Jack, 2013. "Private Information and the Allocation of Land Use Subsidies in Malawi," American Economic Journal: Applied Economics, American Economic Association, vol. 5(3), pages 113-35, July.

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