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Quality Unobserved: Can Information Provision Unlock Demand-Side Incentives for Upgrading in Low-income Countries?

Author

Listed:
  • Cajal-Grossi, Julia
  • Vandewalle, Lore
  • Woodruff, Christopher

Abstract

Can improving consumers' ability to discern quality increase demand-side incentives for quality provision? We conduct a framed field experiment in Uganda's furniture market, where quality dispersion is high but the price-quality gradient is flat. Nearly 900 prospective buyers ranked and priced tables spanning the quality distribution; a random subset received information on quality markers. At baseline, individual consumers perform worse than industry insiders at discerning quality. Information provision closes this gap: treated consumers' likelihood of correct rankings increases by 23 percentage points, and their price-quality gradient steepens significantly. Extrapolated market-wide, this would raise markups for top-quality producers by approximately 7.5%.

Suggested Citation

  • Cajal-Grossi, Julia & Vandewalle, Lore & Woodruff, Christopher, 2026. "Quality Unobserved: Can Information Provision Unlock Demand-Side Incentives for Upgrading in Low-income Countries?," CEPR Discussion Papers 21142, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:21142
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    Keywords

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    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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