Do Non-Monetary Prices Target the Poor?: Evidence from a Field Experiment in India
Peer Reviewed
Date issued
Oct 2016
Subject
Non-Monetary Price;
Water Purifier;
Wage;
Willingness to Pay;
Health Expenditure;
Potable Water;
Household Income;
Water Quality;
Impact Evaluation;
Randomized Controlled Trial
JEL code
C93 - Field Experiments;
D61 - Allocative Efficiency • Cost—Benefit Analysis;
H42 - Publicly Provided Private Goods;
I14 - Health and Inequality;
I15 - Health and Economic Development;
O12 - Microeconomic Analyses of Economic Development
Country
India
Category
Working Papers
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.
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