IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_8904.html
   My bibliography  Save this paper

Testing Willingness to Pay Elicitation Mechanisms in the Field: Evidence from Uganda

Author

Listed:
  • Konrad B. Burchardi
  • Jonathan de Quidt
  • Selim Gulesci
  • Benedetta Lerva
  • Stefano Tripodi

Abstract

Researchers frequently use variants of the Becker-DeGroot-Marschak (BDM) mechanism to elicit willingness to pay (WTP). These variants involve numerous incentive-irrelevant design choices, some of which carry advantages for implementation but may deteriorate participant comprehension or trust in the mechanism, which are well-known problems with the BDM. We highlight three such features and test them in the field in rural Uganda, a relevant population for many recent applications. Comprehension is very high, and 86 percent of participants bid optimally for an induced-value voucher, with little variation across treatments. This gives confidence for similar applications, and suggests the comprehension-expediency trade-off is mild.

Suggested Citation

  • Konrad B. Burchardi & Jonathan de Quidt & Selim Gulesci & Benedetta Lerva & Stefano Tripodi, 2021. "Testing Willingness to Pay Elicitation Mechanisms in the Field: Evidence from Uganda," CESifo Working Paper Series 8904, CESifo.
  • Handle: RePEc:ces:ceswps:_8904
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp8904.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. James Berry & Greg Fischer & Raymond Guiteras, 2020. "Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana," Journal of Political Economy, University of Chicago Press, vol. 128(4), pages 1436-1473.
    2. Vivian Hoffmann, 2009. "Intrahousehold Allocation of Free and Purchased Mosquito Nets," American Economic Review, American Economic Association, vol. 99(2), pages 236-241, May.
    3. Fischer, Greg & Karlan, Dean & McConnell, Margaret & Raffler, Pia, 2019. "Short-term subsidies and seller type: A health products experiment in Uganda," Journal of Development Economics, Elsevier, vol. 137(C), pages 110-124.
    4. James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects, and Econometric Policy Evaluation," Econometrica, Econometric Society, vol. 73(3), pages 669-738, May.
    5. Nava Ashraf & James Berry & Jesse M. Shapiro, 2010. "Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia," American Economic Review, American Economic Association, vol. 100(5), pages 2383-2413, December.
    6. Michael Grimm & Luciane Lenz & Jörg Peters & Maximiliane Sievert, 2020. "Demand for Off-Grid Solar Electricity: Experimental Evidence from Rwanda," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(3), pages 417-454.
    7. Cole, Shawn & Fernando, A. Nilesh & Stein, Daniel & Tobacman, Jeremy, 2020. "Field comparisons of incentive-compatible preference elicitation techniques," Journal of Economic Behavior & Organization, Elsevier, vol. 172(C), pages 33-56.
    8. Mohammad Akbarpour & Shengwu Li, 2020. "Credible Auctions: A Trilemma," Econometrica, Econometric Society, vol. 88(2), pages 425-467, March.
    9. 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.
    10. Jessica Cohen & Pascaline Dupas, 2010. "Free Distribution or Cost-Sharing? Evidence from a Randomized Malaria Prevention Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 1-45.
    11. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
    12. Lawrence M. Ausubel, 2004. "An Efficient Ascending-Bid Auction for Multiple Objects," American Economic Review, American Economic Association, vol. 94(5), pages 1452-1475, December.
    13. Sylvain Chassang & Gerard Padro I Miquel & Erik Snowberg, 2012. "Selective Trials: A Principal-Agent Approach to Randomized Controlled Experiments," American Economic Review, American Economic Association, vol. 102(4), pages 1279-1309, June.
    14. Brebner, Sarah & Sonnemans, Joep, 2018. "Does the elicitation method impact the WTA/WTP disparity?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 73(C), pages 40-45.
    15. Shengwu Li, 2017. "Obviously Strategy-Proof Mechanisms," American Economic Review, American Economic Association, vol. 107(11), pages 3257-3287, November.
    16. Pascaline Dupas, 2014. "Short‐Run Subsidies and Long‐Run Adoption of New Health Products: Evidence From a Field Experiment," Econometrica, Econometric Society, vol. 82(1), pages 197-228, January.
    17. Grimm, Michael & Hartwig, Renate, 2018. "Unblurring the Market for Vision Correction: A Willingness to Pay Experiment in Rural Burkina Faso," IZA Discussion Papers 11929, Institute of Labor Economics (IZA).
    18. Bohm, Peter & Linden, Johan & Sonnegard, Joakim, 1997. "Eliciting Reservation Prices: Becker-DeGroot-Marschak Mechanisms vs. Markets," Economic Journal, Royal Economic Society, vol. 107(443), pages 1079-1089, July.
    19. Ben Yishay, Ariel & Fraker, Andrew & Guiteras, Raymond & Palloni, Giordano & Shah, Neil Buddy & Shirrell, Stuart & Wang, Paul, 2017. "Microcredit and willingness to pay for environmental quality: Evidence from a randomized-controlled trial of finance for sanitation in rural Cambodia," Journal of Environmental Economics and Management, Elsevier, vol. 86(C), pages 121-140.
    20. Kagel, John H & Harstad, Ronald M & Levin, Dan, 1987. "Information Impact and Allocation Rules in Auctions with Affiliated Private Values: A Laboratory Study," Econometrica, Econometric Society, vol. 55(6), pages 1275-1304, November.
    21. Steffen Andersen & Glenn Harrison & Morten Lau & E. Rutström, 2009. "Elicitation using multiple price list formats," Experimental Economics, Springer;Economic Science Association, vol. 12(3), pages 365-366, September.
    22. Hoffmann, Bridget, 2018. "Do non-monetary prices target the poor? Evidence from a field experiment in India," Journal of Development Economics, Elsevier, vol. 133(C), pages 15-32.
    23. Hoffmann, Vivian & Barrett, Christopher B. & Just, David R., 2009. "Do Free Goods Stick to Poor Households? Experimental Evidence on Insecticide Treated Bednets," World Development, Elsevier, vol. 37(3), pages 607-617, March.
    24. Timothy N. Cason & Charles R. Plott, 2014. "Misconceptions and Game Form Recognition: Challenges to Theories of Revealed Preference and Framing," Journal of Political Economy, University of Chicago Press, vol. 122(6), pages 1235-1270.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Manara, Martina & Regan, Tanner, 2022. "Ask a local: improving the public pricing of land titles in urban Tanzania," LSE Research Online Documents on Economics 117856, London School of Economics and Political Science, LSE Library.
    2. Cano, Alexander & Cortes, Darwin & Mantilla, Cesar & Prada-Medina, Laura & Restrepo, Medardo, 2022. "The trade-off between liquidity and insurance: voucher payments in a lab-in-the-field experiment with Colombian rural workers," OSF Preprints 8ft4e, Center for Open Science.
    3. Michael Grimm & Renate Hartwig, 2022. "All eyes on the price: An assessment of the willingness‐to‐pay for eyeglasses in rural Burkina Faso," Health Economics, John Wiley & Sons, Ltd., vol. 31(7), pages 1347-1367, July.
    4. Diekert, Florian & Eymess, Tillmann & Goeschl, Timo & Gómez-Cardona, Santiago & Luomba, Joseph, 2022. "Subsidizing Compliance: A Multi-Unit Price List Mechanism for Legal Fishing Nets at Lake Victoria," Working Papers 0711, University of Heidelberg, Department of Economics.
    5. Jack, B. Kelsey & McDermott, Kathryn & Sautmann, Anja, 2022. "Multiple price lists for willingness to pay elicitation," Journal of Development Economics, Elsevier, vol. 159(C).
    6. Leonardo Bursztyn, 2023. "When Product Markets Become Collective Traps: The Case of Social Media," ECONtribute Discussion Papers Series 260, University of Bonn and University of Cologne, Germany.
    7. Michelle Acampora & Francesco Capozza & Vahid Moghani, 2022. "Mental Health Literacy, Beliefs and Demand for Mental Health Support among University Students," Tinbergen Institute Discussion Papers 22-079/I, Tinbergen Institute.
    8. Leonardo Bursztyn & Benjamin R. Handel & Rafael Jimenez & Christopher Roth, 2023. "When Product Markets Become Collective Traps: The Case of Social Media," NBER Working Papers 31771, National Bureau of Economic Research, Inc.
    9. Carolyn Predmore & Kudret Topyan & Lauren Trabold Apadula, 2021. "Impact of Process Misconception in Becker-DeGroot-Marschak Single Response Value Elicitation Procedures: An Experimental Investigation in Consumer Behavior Using the IKEA Effect," Economies, MDPI, vol. 9(4), pages 1-13, November.
    10. Burchardi, Konrad & de Quidt, Jonathan & Gulesci, Selim & Sulaiman, Munshi, 2021. "Credit Constraints and Demand for Remedial Education: Evidence from Tanzania," CEPR Discussion Papers 15862, C.E.P.R. Discussion Papers.
    11. Maximilian Spath, 2023. "The qualitative accuracy of the Becker-DeGroot-Marshak method," Papers 2302.04055, arXiv.org.
    12. D’Amato, Alessio & Goeschl, Timo & Lorè, Luisa & Zoli, Mariangela, 2023. "True to type? EU-style date marking and the valuation of perishable food," Food Policy, Elsevier, vol. 114(C).
    13. Uttam Paudel & Shiva Raj Adhikari & Krishna Prasad Pant, 2023. "Willingness to Pay for Environmental Quality Improvement Programs and Its Determinants: Empirical Analysis in Western Nepal," Sustainability, MDPI, vol. 15(3), pages 1-20, January.
    14. Dor Morag & George Loewenstein, 2023. "Narratives and Valuations," CESifo Working Paper Series 10714, CESifo.
    15. Hussam,Reshmaan Nahar & Kelley,Erin Munro & Lane,Gregory & Zahra,Fatima, 2022. "The Psychosocial Value of Employment : Evidence from a Refugee Camp," Policy Research Working Paper Series 10138, The World Bank.
    16. Randriamaro, Mary Tiana & Cook, Joseph, 2022. "The value of time, with and without a smartphone," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 138-146.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. James Berry & Greg Fischer & Raymond Guiteras, 2020. "Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana," Journal of Political Economy, University of Chicago Press, vol. 128(4), pages 1436-1473.
    2. Burchardi, Konrad & de Quidt, Jonathan & Gulesci, Selim & Sulaiman, Munshi, 2021. "Credit constraints and demand for remedial education: Evidence from Tanzania," CAGE Online Working Paper Series 545, Competitive Advantage in the Global Economy (CAGE).
    3. Carolyn Predmore & Kudret Topyan & Lauren Trabold Apadula, 2021. "Impact of Process Misconception in Becker-DeGroot-Marschak Single Response Value Elicitation Procedures: An Experimental Investigation in Consumer Behavior Using the IKEA Effect," Economies, MDPI, vol. 9(4), pages 1-13, November.
    4. Gunther Bensch & Jörg Peters, 2020. "One‐Off Subsidies and Long‐Run Adoption—Experimental Evidence on Improved Cooking Stoves in Senegal," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 72-90, January.
    5. Sylvain Chassang & Gerard Padro I Miquel & Erik Snowberg, 2012. "Selective Trials: A Principal-Agent Approach to Randomized Controlled Experiments," American Economic Review, American Economic Association, vol. 102(4), pages 1279-1309, June.
    6. 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.
    7. Shukla, Pallavi & Pullabhotla, Hemant K. & Baylis, Kathy, 2022. "Trouble with zero: The limits of subsidizing technology adoption," Journal of Development Economics, Elsevier, vol. 158(C).
    8. Wang, Lei & Song, Chuyu & Xian, Yue & Sylvia, Sean & Rozelle, Scott, 2024. "Willingness-to-pay for early childhood development: A field experiment in Western China," China Economic Review, Elsevier, vol. 85(C).
    9. Abhijit Banerjee & Sylvain Chassang & Erik Snowberg, 2016. "Decision Theoretic Approaches to Experiment Design and External Validity," NBER Working Papers 22167, National Bureau of Economic Research, Inc.
    10. Yusuke Narita, 2018. "Toward an Ethical Experiment," Cowles Foundation Discussion Papers 2127, Cowles Foundation for Research in Economics, Yale University.
    11. Yusuke Narita, 2018. "Experiment-as-Market: Incorporating Welfare into Randomized Controlled Trials," Cowles Foundation Discussion Papers 2127r, Cowles Foundation for Research in Economics, Yale University, revised May 2019.
    12. Jack, B. Kelsey & McDermott, Kathryn & Sautmann, Anja, 2022. "Multiple price lists for willingness to pay elicitation," Journal of Development Economics, Elsevier, vol. 159(C).
    13. Maurizio Canavari & Andreas C. Drichoutis & Jayson L. Lusk & Rodolfo M. Nayga, Jr., 2018. "How to run an experimental auction: A review of recent advances," Working Papers 2018-5, Agricultural University of Athens, Department Of Agricultural Economics.
    14. Cariappa, A.G. Adeeth & Chandel, B.S. & Sendhil, R. & Dixit, Anil Kumar & Sankhala, Gopal & Mani, Veena & Meena, B.S., 2022. "Do the prices of a preventive animal health product affect dairy farmers’ willingness to pay and product use? Evidence from an experimental study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    15. Paulina Oliva & B. Kelsey Jack & Samuel Bell & Elizabeth Mettetal & Christopher Severen, 2020. "Technology Adoption under Uncertainty: Take-Up and Subsequent Investment in Zambia," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 617-632, July.
    16. Pascaline Dupas & Edward Miguel, 2016. "Impacts and Determinants of Health Levels in Low-Income Countries," NBER Working Papers 22235, National Bureau of Economic Research, Inc.
    17. Meriggi, Niccolò F. & Bulte, Erwin & Mobarak, Ahmed Mushfiq, 2021. "Subsidies for technology adoption: Experimental evidence from rural Cameroon," Journal of Development Economics, Elsevier, vol. 153(C).
    18. Guiteras, Raymond P. & Jack, B. Kelsey, 2018. "Productivity in piece-rate labor markets: Evidence from rural Malawi," Journal of Development Economics, Elsevier, vol. 131(C), pages 42-61.
    19. Martin, Daniel & Muñoz-Rodriguez, Edwin, 2022. "Cognitive costs and misperceived incentives: Evidence from the BDM mechanism," European Economic Review, Elsevier, vol. 148(C).
    20. Hoffmann, Bridget, 2018. "Do non-monetary prices target the poor? Evidence from a field experiment in India," Journal of Development Economics, Elsevier, vol. 133(C), pages 15-32.

    More about this item

    Keywords

    willingness to pay; Becker-DeGroot-Marschak; field experiment;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_8904. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.