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Recognizing a good deal: Short-term subsidies and the dynamics of public service use

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  • Deutschmann, Joshua W.

Abstract

I study the longer-run dynamics of household use of a public service in response to short-term subsidies. I exploit spatial variation in exposure to subsidies that induced households to use a publicly-provided matching platform for sanitation services in Dakar, Senegal. Using platform administrative data, I show that neighborhoods exposed to short-term subsidies are significantly more likely to use the platform after subsidies end, but this effect declines gradually to zero over time. Following a subsequent city-wide subsidy campaign two years later, increased use re-emerges in previously-subsidized neighborhoods before declining again. The pattern of decline and re-emergence shows that short-term subsidies can have persistent effects, but sustaining these effects may require repeated intervention.

Suggested Citation

  • Deutschmann, Joshua W., 2025. "Recognizing a good deal: Short-term subsidies and the dynamics of public service use," Journal of Environmental Economics and Management, Elsevier, vol. 130(C).
    • Handle: RePEc:eee:jeeman:v:130:y:2025:i:c:s0095069624001888
    DOI: 10.1016/j.jeem.2024.103114
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    More about this item

    Keywords

    Technology adoption; Environmental quality; Urban sanitation; Subsidies; Development; Public services; Fecal sludge management;
    All these keywords.

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand

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