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Estimating the Demand for Business Training: Evidence from Jamaica

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  • Alessandro Maffioli
  • David McKenzie
  • Diego Ubfal

Abstract

Business-training programs are typically offered for free. Charging a price for training provides potential benefits such as financial sustainability, but little is known about how price affects demand. We conducted two experiments in Jamaica using the Becker-DeGroot-Marschak (BDM) mechanism and take-it-or-leave-it offers to estimate the demand for training. Most entrepreneurs have positive willingness to pay for training, but demand falls sharply as price increases. Offering the chance to pay in installments does not increase demand. Higher prices screen out poorer, less educated entrepreneurs who have smaller firms. However, charging a higher price does increase attendance among those who pay. Finally, our paper points to the limitations of using a BDM mechanism in a context of low contract enforcement and when payments for purchasing an intangible service do not occur immediately.

Suggested Citation

  • Alessandro Maffioli & David McKenzie & Diego Ubfal, 2023. "Estimating the Demand for Business Training: Evidence from Jamaica," Economic Development and Cultural Change, University of Chicago Press, vol. 72(1), pages 123-158.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/719031
    DOI: 10.1086/719031
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    3. Burchardi, Konrad B. & de Quidt, Jonathan & Gulesci, Selim & Lerva, Benedetta & Tripodi, Stefano, 2021. "Testing willingness to pay elicitation mechanisms in the field: Evidence from Uganda," Journal of Development Economics, Elsevier, vol. 152(C).
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