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The controversy over whether and how much to charge for health products in the developing world rests, in part, on whether higher prices can increase use. We test this hypothesis in a field experiment in Zambia using door-to-door marketing of a home water purification solution. Our methodology separates the screening effect of prices (charging more changes the mix of buyers) from the psychological effect of prices (charging more stimulates greater use for a given buyer). We find that higher prices screen out those who use the product less. The amount paid does not have a psychological effect on use, but there is some evidence that the act of paying increases use. We use our data to estimate an economic model of product use, simulate counterfactuals, and develop tentative implications for pricing policy.
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Subjects
Econometric models, Economic aspects, Health products, Prices, Purification, Usage, WaterPlaces
Developing countries, ZambiaShowing 4 featured editions. View all 4 editions?
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Can higher prices stimulate product use?: evidence from a field experiment in Zambia
2008, Harvard Business School
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Can higher prices stimulate product use?: evidence from a field experiment in zambia
2007, National Bureau of Economic Research
electronic resource
in English
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Can higher prices stimulate product use?: evidence from a field experiment in Zambia
2007, National Bureau of Economic Research
in English
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4
Can higher prices stimulate product use?: evidence from a field experiment in Zambia
2007, Harvard Business School
in English
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Book Details
Edition Notes
"July 2007."
Includes bibliographical references (p. 34-38).
Also available in PDF from the NBER world wide web site (www.nber.org).
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Feedback?December 3, 2010 | Edited by Open Library Bot | Added subjects from MARC records. |
December 10, 2009 | Created by WorkBot | add works page |