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

46 Pages Posted: 23 May 2014 Last revised: 7 Nov 2014

See all articles by Greg Fischer

Greg Fischer

London School of Economics & Political Science (LSE) - Department of Economics

Dean S. Karlan

Northwestern University - Kellogg School of Management; Yale University; Innovations for Poverty Action; Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Margaret McConnell

Harvard University

Pia Raffler

Yale University - Department of Political Science

Multiple version iconThere are 3 versions of this paper

Date Written: October 2014

Abstract

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.

Keywords: subsidies, health, pricing, learning

JEL Classification: D11, D12, D83, I11, I18, O12

Suggested Citation

Fischer, Greg and Karlan, Dean S. and McConnell, Margaret and Raffler, Pia, To Charge or Not to Charge: Evidence from a Health Products Experiment in Uganda (October 2014). Yale University Economic Growth Center Discussion Paper No. 1041, Yale Economics Department Working Paper No. 133, Available at SSRN: https://ssrn.com/abstract=2439962

Greg Fischer (Contact Author)

London School of Economics & Political Science (LSE) - Department of Economics ( email )

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Dean S. Karlan

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
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Yale University ( email )

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Innovations for Poverty Action ( email )

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Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab (J-PAL) ( email )

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National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR) ( email )

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Margaret McConnell

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Pia Raffler

Yale University - Department of Political Science ( email )

115 Prospect Street
New Haven, CT 06520-8269
United States

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