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To Charge or Not to Charge: Evidence from a Health Products Experiment in Uganda

  • Greg Fischer
  • Dean Karlan
  • Margaret McConnell
  • Pia Raffler

In a field experiment in Uganda, we find that demand after a free distribution of three health products is lower than after a sale distribution. This contrasts with work on insecticide-treated bed nets, highlighting the importance of product characteristics in determining pricing policy. We put forward a model to illustrate the potential tension between two important factors, learning and anchoring, and then test this model with three products selected specifically for their variation in the scope for learning. We find the rank order of shifts in demand matches with the theoretical prediction, although the differences are not statistically significant.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 20170.

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Date of creation: May 2014
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Handle: RePEc:nbr:nberwo:20170
Note: DEV HE LS
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