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

60 Pages Posted: 2 Jun 2014 Last revised: 5 Apr 2021

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: May 2014

Abstract

In a field experiment in Uganda, a free distribution of three health products lowers subsequent demand relative to 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 of these 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 percentage change of shifts in demand matches theoretical predictions, although the differences are not statistically significant, and only two of three pairwise comparisons match when the reductions are specified in percent terms. These results highlight the importance of understanding pricing policy with respect to product, market, and household characteristics.

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 (May 2014). NBER Working Paper No. w20170, Available at SSRN: https://ssrn.com/abstract=2444537

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 )

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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 )

Pia Raffler

Yale University - Department of Political Science ( email )

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

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