Do Non-Monetary Prices Target the Poor? Evidence from a Field Experiment in India

51 Pages Posted: 25 Apr 2017

Date Written: September 2016

Abstract

This paper uses willingness to pay (WTP) data from a field experiment in Hyderabad, India in 2013 to determine whether non-monetary prices better target health products to the poor than monetary prices. Monetary WTP is increasing in income and non-monetary WTP is weakly decreasing in income. Household fixed effects in a pooled sample of monetary WTP and non-monetary WTP are used to compare the correlation of income and WTP across price types. It is found that non-monetary WTP falls relative to monetary WTP as income rises. Finally, a greater fraction of demand is comprised of the poor at non-monetary prices.

Keywords: Non-monetary price, Ordeal mechanism, Targeting, Subsidies

JEL Classification: C93, D61, H42, I14, I15, O12

Suggested Citation

Hoffmann, Bridget, Do Non-Monetary Prices Target the Poor? Evidence from a Field Experiment in India (September 2016). IDB Working Paper No. IDB-WP-725, Available at SSRN: https://ssrn.com/abstract=2956701 or http://dx.doi.org/10.2139/ssrn.2956701

Bridget Hoffmann (Contact Author)

Inter-American Development Bank ( email )

1300 New York Ave., NW
Washington, DC 20577
United States

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