learning about a new technology pineapple in ghana this paper investigates the role of social learning in the diffusion of a new agri cultural technology in ghana we use unique data on farmers communication patterns to define each individual s information neighborhood conditional on many potentially confounding variables we find evidence that farmers adjust their inputs to align with those of their information neighbors who were surpris ingly successful in previous periods the relationship of these input adjustments to experience further indicates the presence of social learning in addition applying the same method to input choices for another crop of known technol ogy correctly indicates an absence of social learning effects jel d83 013 033 q16

technology adoption under uncertainty take up and subsequent investment in zambia technology adoption often requires multiple stages of investment as new information emerges agents may abandon a technology that was profitable in expectation we use a field experiment to vary t

short run needs and long term goals a dynamic model of thirst management beverage consumption occurs many times a day in response to short run needs that fluctuate we develop a model in which consumers are heterogeneous in self regulating consumption by balancing short run needs e g hydration and mood with long term goals e g health the model has two novel features 1 utility depends on the match between occasion specific needs and product attributes and 2 dynamics of consumption and stockpiling are at the level of product attributes we estimate the model using unique intraday beverage consumption activity and psychological needs data we find that only a third of individuals do not self regulate of the two thirds who self regulate over 40 self regulate adaptively based on past choice whereas 25 self regulate both adaptively and anticipating future needs our attribute need match model enables us to assess unmet demand for new products with attributes that match co occurring occasion specific needs specifically we find that a product satisfying a combination of health hydrating needs expands overall beverage consumption by as much as 5 our framework of modeling heterogeneity in self regulation by balancing short run needs with long term goals is more broadly applicable in contexts where situational needs vary and long term effects are gradual and hard to discern e g nutrition smoking and preventive health care

social networks and technology adoption in northern mozambique despite their potentially strong impact on poverty agricultural innovations are often adopted slowly using a unique household dataset on sunflower adoption in mozambique we analyse whether and how individual adoption decisions depend upon the choices of others in the same social networks since farmers anticipate that they will share information with others we expect farmers to be more likely to adopt when they know many other adopters dynamic considerations however suggest that farmers who know many adopters might strategically delay adoption to free ride on the information gathered by others we present empirical evidence that shows that the relationship between the probability of adoption and the number of known adopters is shaped as an inverse u in line with information sharing the network effect is stronger for farmers who report discussing agriculture with others the data contains information which is needed to ameliorate the identification issues that commonly arise in this context in particular social networks are precisely identified and in addition we can control for village heterogeneity and endogenous group formation

advertising competition under consumer inertia we construct a multistage game theoretic model of advertising and price competition in a differentiated products duopoly in which proportions of consumers exhibit latent inertia in favor of repeat purchase advertising simultaneously plays the dual role in reducing such inertia through awareness and enhancing perceived brand value persuasion we derive the advertising price cross effects and provide a theoretical reconciliation of the longstanding debate in the marketing literature regarding the impact of advertising on price sensitivity we characterize the nature of equilibria under symmetry and show that when a large proportion of consumers exhibit inertial tendencies then a multiplicity of equilibria exists marketing implications and comparative statics are discussed numerical simulations for asymmetric firms are presented wherein we show that advertising is not a useful competitive tool for small firms however advertising spending by the large firm provides a halo effect for the average prices in the category which has a positive externality on the small firm s profits in the absence of the small brand advertising larger brand shares encourage firms to allocate higher expenditures on advertising to enhance the perceived value of their brand which in turn shore up the average prices in the industry from which all firms benefit

why don t the poor save more evidence from health savings experiments using data from a field experiment in kenya we document that providing individuals with simple informal savings technologies can substantially increase investment in preventative health and reduce vulnerability to health shocks simply providing a safe place to keep money was sufficient to increase health savings by 66 percent adding an earmarking feature was only helpful when funds were put toward emergencies or for individuals that are frequently taxed by friends and relatives group based savings and credit schemes had very large effects

information and subsidies complements or substitutes abstract does providing information about a product influence the impact of price subsidies on purchases this question is particularly relevant for health products in developing countries where both informational campaigns and price subsidies are common policy instruments we conduct a field experiment in zambia and find that providing information about a new version of a product significantly increases the impact of price subsidies on take up taken alone the information manipulation has no significant impact on demand while the price subsidy substantially increases demand however the evaluation of either intervention in isolation fails to capture the significant complementarity between the two

intrahousehold allocation of free and purchased mosquito nets for some health goods intrahousehold allocation may be more important in determining outcomes than household level consumption an example is the use of mosquito nets to prevent malaria malaria kills over one million people annually 90 percent of them children under the age of five the use of insecticide treated mosquito nets itns is considered the most costeffective available strategy for control of the disease in 2000 44 of the 50 malaria affected countries in africa committed themselves to increasing the use of itns by vulnerable populations in particular children under five years of age and pregnant women adults in malarious regions have typically acquired some immunity to the disease through repeated exposure over the course of their lives the risk of severe malaria resulting in lifelong disability or death is highest for young children and pregnant women across transmission environments robert w snow et al 2003 on the other hand lost labor time often accounts for the largest portion of the private cost of the disease this implies a trade off between minimizing the income lost to malaria and minimizing the risk that a household member dies or is permanently disabled despite public health messages emphasizing the importance of using mosquito nets to protect young children from malaria nets are often used by adults when a household does not have enough nets to cover all members eline l korenromp et al 2003 frederick mugisha and jacqueline arinaitwe 2003 determining the welfare maximizing allocation of nets is intrahousehold allocation of free and purchased mosquito nets

zero as a special price the true value of free products when faced with a choice of selecting one of several available products or possibly buying nothing according to standard theoretical perspectives people will choose the option with the highest cost benefit difference however we propose that decisions about free zero price products differ in that people do not simply subtract costs from benefits but instead they perceive the benefits associated with free products as higher we test this proposal by contrasting demand for two products across conditions that maintain the price difference between the goods but vary the prices such that the cheaper good in the set is priced at either a low positive or zero price in contrast with a standard cost benefit perspective in the zero price condition dramatically more participants choose the cheaper option whereas dramatically fewer participants choose the more expensive option thus people appear to act as if zero pricing of a good not only decreases its cost but also adds to its benefits after documenting this basic effect we propose and test several psychological antecedents of the effect including social norms mapping difficulty and affect affect emerges as the most likely account for the effect

health and agricultural productivity evidence from zambia we evaluate the productivity effects of investment in preventive health technology through a randomized controlled trial in rural zambia in the experiment access to subsidized bed nets was randomly assigned at the community level 516 farmers were followed over a one year farming period we find large positive effects of preventative health investment on productivity among farmers provided with access to free nets harvest value increased by us 76 corresponding to about 14 7 of the average output value while only limited information was collected on farming inputs shifts in the extensive and the intensive margins of labor supply appear to be the most likely mechanism underlying the productivity improvements observed

environment health and human capital in this review we discuss three major contributions economists have made to our understanding of the relationship between the environment and individual well being first in explicitly recognizing how optimizing behavior particularly in the form of residential sorting can lead to nonrandom assignment of pollution economists have employed a wide range of quasi experimental techniques to develop causal estimates of the effect of pollution second economic research has placed a considerable focus on the role of avoidance behavior which is an important component for understanding the difference between biological and behavioral effects of pollution and for proper welfare calculations lastly economic research has expanded the focus of analysis beyond traditional health outcomes to include measures of human capital including labor supply productivity and cognition our review of the quasi experimental evidence on this topic suggests that pollution does indeed have a wide range of effects on individual well being even at levels well below current regulatory standards given the importance of health and human capital as an engine for economic growth these findings underscore the role of environmental conditions as an important factor of production jel i12 i31 j24 q51 q53

on real and sticky price theories of the business cycle after presenting some facts about the growth of government in western industrialized countries possible causes of this development are analyzed from a public choice perspective next some empirically tested theories which seek to explain this growth are discussed finally possible consequences for efficiency and individual liberty are examined it is shown that both the number and size of interest groups age of democracy as stated by mancur olson 1982 and the increasing share of government expenditure in gdp seem to exert a negative influence on the growth rate of gdp copyright 1986 by ohio state university press

high and declining prices signal product quality high and declining prices signal a high quality product high prices are the efficient means of signaling because the consequent loss of sales volume is most damaging for lower cost lower quality products as time passes and the number of informed consumers increases the signaling distortion lessens resulting in a declining price profile the prediction of high and declining prices is robust across a variety of dynamic models and is consistent with recent empirical findings copyright 1991 by american economic association

selective trials a principal agent approach to randomized controlled experiments we study the design of randomized controlled experiments when outcomes are significantly affected by experimental subjects unobserved effort expenditure while standard randomized controlled trials rcts are internally consistent the unobservability of effort compromises external validity we approach trial design as a principal agent problem and show that natural extensions of rcts which we call selective trials can help improve external validity in particular selective trials can disentangle the effects of treatment effort and the interaction of treatment and effort moreover they can help identify when treatment effects are affected by erroneous beliefs and inappropriate effort expenditure

what matters and what does not in households decision to invest in malaria prevention this paper examines the take up of a new malaria control device by rural households in kenya and tests whether the demand curve for the device varies with the framing of marketing messages and with the gender of the person targeted by the marketing previous research suggests that the demand for malaria prevention is highly price sensitive jessica cohen and dupas 2008 even though the private returns to preventing malaria are very large christian lengeler 2004 in the standard model of investment in human capital individuals invest in a health product if the expected benefits from the product outweigh its costs michael grossman 1972 in this framework the low take up observed at relatively moderate prices by cohen and dupas 2008 could be due to people underestimating the expected benefits of investing in prevention or due to people being credit constrained and unable to pay the cost up front it is also possible that the standard model does not apply because people have time inconsistent preferences or because they are uncertain about their own preferences and rely on external cues to resolve their own uncertainty when they need to make a decision an extensive literature in psychology and marketing suggests that decision making can be affected by frames or cues that do not add information about a product but can be effective at persuading individuals to invest in it for example in a recent field experiment in south africa marianne bertrand et al 2008 found what matters and what does not in households decision to invest in malaria prevention

dynamic pricing of new experience goods we develop a dynamic model of experience goods pricing with independent private valuations we show that the optimal paths of sales and prices can be described in terms of a simple dichotomy in a mass market prices are declining over time in a niche market the optimal prices are initially low followed by higher prices that extract surplus from the buyers with a high willingness to pay we consider extensions of the model to integrate elements of social rather than private learning and turnover among buyers

keeping the doctor away experimental evidence on investment in preventative health products household investment in preventative health products in developing countries is typically low even though the returns to such products are high in this paper we experimentally estimate demand curves for health products and test whether 1 information about health risk 2 cash liquidity 3 peer effects and 4 intra household differences in preferences affect demand in our main experiment in kenya involving children s shoes critical for preventing hookworm infection price is by far the most important predictor of purchase providing liquidity and targeting women also increased demand information had no effect even though we find that genuine learning occurred we find no peer effects even though people discussed the product purchase decision extensively we find similar results for price and information in three smaller studies in guatemala india and uganda in experiments involving soap and multivitamins

a network equilibrium framework for internet advertising models qualitative analysis and algorithms in this paper we develop a network equilibrium framework for the modeling and analysis of competitive firms engaged in internet advertising among multiple websites the model allows for the determination of both the equilibrium online advertising budget as well as the advertising expenditures on the different websites we then specialize the model to the case of fixed online budgets for the firms the governing equilibrium conditions of both models are shown to satisfy finite dimensional variational inequalities we present qualitative properties of the solution patterns as well as computational procedures that exploit the underlying abstract network structure of these problems the models and algorithms are illustrated with numerical examples this paper adds to the growing literature of the application of network based techniques derived from operations research to the advertising marketing arena

learning by doing and learning from others human capital and technical change in agriculture household level panel data from a nationally representative sample of rural indian households describing the adoption and profitability of high yielding seed varieties hyvs associated with the green revolution are used to test the implications of a model incorporating learning by doing and learning spillovers the estimates indicate that i imperfect knowledge about the management of the new seeds was a significant barrier to adoption ii this barrier diminished as farmer experience with the new technologies increased iii own experience and neighbors experience with hyvs significantly increased hyv profitability and iv farmers do not fully incorporate the village returns to learning in making adoption decisions

can higher prices stimulate product use evidence from a field experiment in zambia the controversy over how much to charge for health products in the developing world rests in part on whether higher prices can increase use either by targeting distribution to high use households a screening effect or by stimulating use psychologically through a sunk cost effect we develop a methodology for separating these two effects we implement the methodology in a field experiment in zambia using door to door marketing of a home water purification solution we find evidence of economically important screening effects by contrast we find no consistent evidence of sunk cost effects jel c93 d12 i11 m31 o12

the menu setting problem and subsidized prices drug formulary illustration the menu setting problem msp determines the goods and services an institution offers and the prices charged it appears widely in health care from choosing the services an insurance arrangement offers to selecting the health plans an employer proffers the challenge arises because purchases are subsidized and consumers or their physician agents may make cost ineffective choices the intuitively comprehensible msp model readily solved by computer using actual data helps structure thinking and support decision making about such problems the analysis uses drug formularies lists of approved drugs in a plan or institution to illustrate the framework

underinvestment in a profitable technology the case of seasonal migration in bangladesh hunger during pre harvest lean seasons is widespread in the agrarian areas of asia and sub saharan africa we randomly assign an 8 50 incentive to households in rural bangladesh to temporarily out migrate during the lean season the incentive induces 22 of households to send a seasonal migrant their consumption at the origin increases significantly and treated households are 8 10 percentage points more likely to re migrate 1 and 3 years after the incentive is removed these facts can be explained qualitatively by a model in which migration is risky mitigating risk requires individual specific learning and some migrants are sufficiently close to subsistence that failed migration is very costly we document evidence consistent with this model using heterogeneity analysis and additional experimental variation but calibrations with forward looking households that can save up to migrate suggest that it is difficult for the model to quantitatively match the data we conclude with extensions to the model that could provide a better quantitative accounting of the behavior

spring cleaning rural water impacts valuation and property rights institutions the brief summarizes the spring cleaning rural water impacts valuation and property rights institutions the first two rounds of spring protection occurred in january april 2005 and august november 2005 the author measure health impacts of spring protection an investment that improves source water quality the author also estimate households valuation of spring protection and simulate the welfare impacts of alternatives to the current system of common property rights in water which limits incentives for private investment spring infrastructure investments reduce fecal contamination by 66 percent but household water quality improves less due to recontamination child diarrhea falls by one quarter travel cost based revealed preference estimates of households valuations are much smaller than both stated preference valuations and health planners valuations and are consistent with models in which the demand for health is highly income elastic the author estimate that private property norms would generate little additional investment while imposing large static costs due to above marginal cost pricing private property will function better at higher income levels or underwater scarcity and alternative institutions could yield pareto improvements

experimentation in markets we present a model of entry and exit with bayesian learning and price competition a new product of initially unknown quality is introduced in the market and purchases of the product yield information on its true quality we assume that the performance of the new product is publicly observable as agents learn from the experiments of others informational externalities arise we determine the markov perfect equilibrium prices and allocations in a single market the combination of the informational externalities among the buyers and the strategic pricing by the sellers results in excessive experimentation if the new product is launched in many distinct markets the path of sales converges to the efficient path in the limit as the number of markets grows in multi agent learning situations informational externalities may reduce the number of experiments undertaken below the socially efficient level as buyers choose among new experience goods or firms decide whether to adopt a new technology the availability of information from others decisions gives rise to a free rider problem rather than perform a costly experiment herself a buyer may opt to wait and see how the market evaluates the new product in this paper we develop a simple market model of experimentation and analyse the informational effects in a model with buyers and sellers in contrast to the one sided experimentation problems we find that equilibrium experimentation often exceeds the pareto optimal level in two sided models the first model we consider is a dynamic duopoly in continuous time with homogeneous buyers two firms with differentiated products engage in price competition over time one product has a known value while the other is new and its true value is initially uncertain to all the parties in the model the value of the product is determined by the quality of the match between consumer preferences and product characteristics additional information is acquired only through repeat purchases in each period buyers observe a noisy signal of the true value of the product we assume that all signals are publicly observable and that all uncertainty is about a common value component with this assumption all buyers and sellers condition their behaviour on the same information and we can abstract from individual differences in past observations this is justified in economic situations where public data on other buyers choices is available and informative for example when choosing among providers of communication or transportation services such as mail delivery firms or airlines it is reasonable to rely on consumer reports and other published data in addition to one s private experience we also show that our model has an alternative interpretation as one where a flow of buyers make a once and

do non monetary prices target the poor evidence from a field experiment in india monetary price subsidies are often used to increase take up of health products but monetary prices may screen out those with the highest returns the poor using willingness to pay wtp data from a field experiment in india this paper determines whether nonmonetary prices better target health products to the poor than monetary prices it is found that monetary wtp is increasing in income and nonmonetary wtp is weakly decreasing in income comparing across price types nonmonetary wtp falls relative to monetary wtp as income rises nonmonetary prices better target the poor than monetary prices a larger fraction of total demand is poor

arsenic mitigation in bangladesh a household labor market approach rural families in bangladesh one of the poorest countries in the world face financial risks from major illness both from the cost of medical care and from the loss of income associated with reduced labor supply and productivity chronic exposure to arsenic in drinking water has often been associated with the development of skin cancers and internal cancers especially of the bladder liver and lungs and a wide variety of other health conditions such as diabetes respiratory problems cardiovascular diseases hyperpigmentation hypopigmentation and keratosis a condition in which painful nodules grow on the palms of the hands and soles of the feet most of the economic work on arsenic contamination in bangladesh has had an epidemiological focus that has tried to effectively monetize a dose response relation using either a cost of illness or a willingness to pay approach

private health investments under competing risks evidence from malaria control in senegal this study exploits the introduction of high subsidies for anti malaria products in senegal in 2009 to investigate if malaria prevents parents to invest in child health building upon the seminal paper of dow et al 1999 we develop a simple model of health investments under competing mortality risks in which people allocate expenses to equalize lifetime across all causes of death we predict that private health investments to fight malaria as well as other diseases should increase in response to anti malaria public interventions to test this prediction we use original panel data from a senegalese household survey combined with geographical information on malaria prevalence our strategy is to compare the evolution of child health expenditures before and after anti malaria interventions between malarious and non malarious regions of senegal we find that health expenditures in malarious regions catch up with non malarious regions at the extensive and intensive margins and both in level and in composition the same result holds for parental health seeking behavior in case of other diseases like diarrhea we provide evidence that these patterns cannot be explained by differential trends in total income or access to healthcare or child morbidity between malarious and non malarious regions our results suggest that behavioral responses to anti malaria campaigns magnify their impact on all cause mortality for children

eliciting and utilizing willingness to pay evidence from field trials in northern ghana we utilize the becker degroot marschak 1964 mechanism to estimate the willingness to pay for clean drinking water technology in northern ghana the bdm mechanism has attractive properties for empirical research allowing us to directly estimate demand compute heterogeneous treatment effects and study the screening and causal effects of prices with minor modifications to a standard field experiment setting we demonstrate the implementation of bdm along these three dimensions compare it to the standard take it or leave it method for eliciting willingness to pay and discuss practical issues for implementing the mechanism in true field settings jel classifications c93 d12 d82 l11 l31

alcohol and self control a field experiment in india this paper studies alcohol consumption among low income workers in india in a 3 week field experiment the majority of 229 cycle rickshaw drivers were willing to forgo substantial monetary payments in order to set incentives for themselves to remain sober thus exhibiting demand for commitment to sobriety randomly receiving sobriety incentives significantly reduced daytime drinking while leaving overall drinking unchanged i find no evidence of higher daytime sobriety significantly changing labor supply productivity or earnings in contrast increasing sobriety raised savings by 50 percent an effect that does not appear to be solely explained by changes in income net of alcohol expenditures

unintended consequences of sanctions for human rights conflict minerals and infant mortality abstractare victims of human rights abuses better off with or without economic sanctions targeted at their perpetrators we study this question in the context of a us human rights policy the conflict minerals section of the 2010 dodd frank act by discouraging companies from sourcing tin tungsten and tantalum from the eastern democratic republic of the congo the policy has acted as a de facto boycott on mineral purchases that may finance warlords and armed militias we estimate the policy s impact on the mortality of children born before 2013 and find that it increased the probability of infant deaths in villages near the policy targeted mines by at least 143 percent we find suggestive evidence that the legislation induced boycott did so by reducing mothers consumption of infant health care goods and services

tests of rationality neutrality and market efficiency a monte carlo analysis of alternative test statistics abstract this paper examines the small sample properties of three testing strategies used to analyze the rationality monetary neutrality and market efficiency hypotheses we focus on the original two step barro test of the mre hypothesis formed entirely from ols results a test that employs the correct variance covariance formulae for these two step estimates and mishkin s fimle testing framework each test is examined under likely model respecifications the findings highlight the extensive bias incurred by drawing inferences from simple unadjusted two step estimates and reveal the relative power of all tests in identifying alternatives to the null hypotheses

sensitivity analysis for the general spatial economic equilibrium problem we consider the general spatial economic equilibrium problem where the supplies and demands at each market for each commodity may depend on the price on this as well as other prices of other commodities at other markets and the transportation cost on each link for each commodity may depend on the flow on this as well as other flows of other commodities on other links in the network for this model we perform stability and sensitivity analysis assuming that the supply demand and transportation cost functions are monotone we first show that the multicommodity equilibrium price pattern depends continuously upon the market supply and demand functions and the multicommodity equilibrium shipment pattern depends continuously upon the transportation cost functions we then focus on the delicate question of predicting the direction of the change in the price and shipment pattern and the incurred supplies demands and transportation costs resulting from changes in the supply demand and transportation cost fu

the illusion of sustainability this brief summarizes the results of a gender impact evaluation study entitled the illusion of sustainability conducted during the time period 1998 to 2001 in kenya the study observed that deworming is a public good since much of its social benefit comes through reduced disease transmission people were less likely to take deworming if their direct first order or indirect second order social contacts were exposed to deworming the introduction of a small fee for deworming drugs led to an 80 percent reduction in treatment rates take up was not sensitive to the exact price level suggesting that it is particularly counter productive to charge small positive prices for the treatment of infectious diseases an intensive school health education had no impact on worm prevention funding for the study derived from world bank nih fogarty international center berkeley center for health research

microeconomic approaches to development schooling learning and growth within the field of economic development over the past 15 years or so particularly significant advances have been made in what can be loosely called micro development an area defined principally by the units that are examined not by a particular methodological approach the units may be indi viduals households networks banks government agencies and so on as opposed to countries within this area economists use a wide variety of empirical methods informed to different degrees by economic models they use data from developed and

tiered co payments pricing and demand in reference price markets for pharmaceuticals health insurance companies curb price insensitive behavior and the moral hazard of insureds by means of cost sharing such as tiered co payments or reference pricing in drug markets this paper evaluates the effect of price limits below which drugs are exempt from co payments on prices and on demand first using a difference in differences estimation strategy we find that the new policy decreases prices by 5 percent for generics and increases prices by 4 percent for brand name drugs in the german reference price market second estimating a nested logit demand model we show that consumers appreciate co payment exempt drugs and calculate lower price elasticities for brand name drugs than for generics this explains the different price responses of brand name and generic drugs and shows that price related co payment tiers are an effective tool to steer demand to low priced drugs

are output fluctuations transitory according to the conventional view of the business cycle fluctuations in output represent temporary deviations from trend the purpose of this paper is to question this conventional view if fluctuations in output are dominated by temporary deviations from the natural rate of output then an unexpected change in output today should not substantially change one s forecast of output in say five or ten years our examination of quarterly postwar united states data leads us to be skeptical about this implication the data suggest that an unexpected change in real gnp of 1 percent should change one s forecast by over 1 percent over a long horizon

targeting transfers through restrictions on recipients our objective is to design transfer programs that maximize some social welfare function following the optimal income tax formulation we assume that a random process endows individuals with characteristics that influence welfare such as ability to earn income medical condition or unmonitorable income the goal is to maximize the utility of a randomly chosen individual other individualistic social welfare functions would lead to equivalent results if the random characteristics were observable a first best outcome could be achieved by making them the basis for lump sum transfers in practice however we can observe only indicators of these characteristics such as earnings medical expenditures or consumption patterns the challenge for policy is to design an efficient second best transfer program based on indicators in this paper we argue that 1 an optimal transfer program in general must sacrifice productive efficiency to target efficiency this is done by imposing restrictions on the choices made by intended beneficiaries 2 a program that incorporates restrictions such as means tested in kind transfers commodity specific taxes and subsidies and even ordeals i e the imposition of deadweight costs to qualify for a transfer will perform better than programs that rely solely on income taxes and cash transfers

model evaluation based on residual analysis of two similar models models that may appear to have different properties may in fact produce residuals that differ only in subtle ways by analysing the relationships between model residuals the problems in distinguishing between models can perhaps be discovered as illustrated by the econometric examples considered regressing residuals gives the long memory residual which is the difference between two models but this difference is very subtle and deeply hidden which explains why the traditional standard technique does not find this difference

seeing is believing evidence from an extension network experiment extension is designed to enable lab to farm technology diffusion decentralized models assume that information flows from researchers to extension workers and from extension agents to contact farmers cfs cfs should then train other farmers in their communities such a modality may fail to address informational inefficiencies and accountability issues the authors run a field experiment to measure the impact of augmenting the cf model with a direct cf training on the diffusion of a new technology all villages have cfs and access the same extension network in treatment villages cfs additionally receive a three day central training on the new technology they track information transmission through two nodes of the extension network from extension agents to cfs and from cfs to other farmers directly training cfs leads to a large statistically significant increase in adoption among cfs however higher levels of cf adoption have limited impact on the behavior of other farmers

micro loans insecticide treated bednets and malaria evidence from a randomized controlled trial in orissa india we describe findings from the first large scale cluster randomized controlled trial in a developing country that evaluates the uptake of a health protecting technology insecticide treated bednets itns through micro consumer loans as compared to free distribution and control conditions despite a relatively high price 52 percent of sample households purchased itns highlighting the role of liquidity constraints in explaining earlier low adoption rates we find mixed evidence of improvements in malaria indices we interpret the results and their implications within the debate about cost sharing sustainability and liquidity constraints in public health initiatives in developing countries

does price affect the demand for information about new health technologies evidence from a field experiment in nigeria we study how prices influence the demand for information about a new preventative health technology we conducted a field experiment in nigeria where women were offered the opportunity to get screened for cervical cancer at baseline 2 3 of women had no knowledge of cervical cancer screening field staff made house calls to give women information about the test and also distributed vouchers that randomly varied the price of screening at the point of service we find an inverse u shaped relationship between prices and the demand for information going from zero to a small positive price increased the demand for information about the test but increasing the price further by 100 resulted in a net decrease in the demand for information we argue that these results have interesting implications for the debate about the pricing of new health technologies in developing countries

demand for environmental quality information and household response evidence from well water arsenic testing access to information about environmental quality may facilitate low cost preventive measures that protect human health in this paper we study the demand for information about environmental quality and the behavioral response to the information provided with a field experiment conducted in bihar india we estimate the price sensitivity of demand for diagnostic testing of drinking water wells for arsenic of natural origin a serious threat to the health of tens of millions of villagers across south and southeast asia demand is substantial but sensitive to price uptake falls from 68 to 31 of households over our price range rs 10 to rs 50 we further assess how households respond to information regarding the contamination level in their wells about one third of households with unsafe wells switch to a safer water source finally we demonstrate that households that received adverse test outcomes are more likely to selectively forget test results and proactively remove evidence of their wells arsenic status

price subsidies diagnostic tests and targeting of malaria treatment evidence from a randomized controlled trial author s dupas pascaline cohen jessica schaner simone abstract both under and over treatment of communicable diseases are public bads but efforts to decrease one run the risk of increasing the other using rich experimental data on household treatment seeking behavior in kenya we study the implications of this tradeoff for subsidizing life saving antimalarials sold over the counter at retail drug outlets we show that a very high subsidy such as the one under consideration by the international community dramatically increases access but nearly half of subsidized pills go to patients without malaria we study two ways to better target subsidized drugs reducing the subsidy level and introducing rapid malaria tests over the counter

health nutrition and economic development the relationship between health and economic development is explored focusing on nutrition based health indicators the spotlight is placed on the inter related feedbacks between the influence of health on productivity on one hand and the influence of income on health status on the other disentangling causality in these relationships has preoccupied much of the literature we evaluate different empirical strategies that have been adopted and assess the results there is now a body of evidence based on careful empirical studies that demonstrates a causal relationship between health and labor productivity there is also evidence that at least among the very poor additional income is spent on improved nutrition there are two issues that have received little attention although we argue they are likely to be very important first measurement of health is discussed in detail evidence is presented on how taking into account differences in the extent of measurement error is critical for interpreting the impact of health on wages the same theme emerges in studies of the effect of income on health specifically calorie intake the key role of non linearities in these relationships is highlighted and we demonstrate that a good deal of the variation in estimates of income elasticities of demand for calories can be ascribed to the role of measurement and functional form authors

does gnp have a unit root a re evaluation abstract stock and watson 1986 test the hypothesis that real per capita gnp has a unit root by using a test statistic due to phillips 1985 which incorporates a non parametric correction for the serial correlation induced by system and error dynamics the version of this test that is used by stock and watson does not accomodate the presence of a drift and to compensate they detrend the series by extracting a 1 5 annual trend growth we use a version of this class of non parametric tests developed by phillips and perron 1986 which allows for an estimated drift and reassess the stock and watson findings

free distribution or cost sharing evidence from a randomized malaria prevention experiment author s cohen jessica dupas pascaline abstract it is often argued that cost sharing charging a subsidized positive price for a health product is necessary to avoid wasting resources on those who will not use or do not need the product we explore this argument through a field experiment in kenya in which we randomized the price at which prenatal clinics could sell long lasting anti malarial insecticide treated nets itns to pregnant women we find no evidence that costsharing reduces wastage on those that will not use the product women who received free itns are not less likely to use them than those who paid subsidized positive prices we also find no evidence that costsharing induces selection of women who need the net more those who pay higher prices appear no sicker than the average prenatal client in the area in terms of measured anemia an important indicator of malaria cost sharing does however considerably dampen demand we find that uptake drops by 75 percent when the price of itns increases from zero to 0 75 i e from 100 to 87 5 percent subsidy the price at which itns are currently sold to pregnant women in kenya we combine our estimates in a cost effectiveness analysis of itn prices on child mortality that incorporates both private and social returns to itn usage overall our results suggest that free distribution of itns could save many more lives than cost sharing programs have achieved so far and given the large positive externality associated with widespread usage of itns it would likely do so at a lesser cost per life saved

short run subsidies and long run adoption of new health products evidence from a field experiment short run subsidies for health products are common in poor countries how do they affect long run adoption a common fear among development practitioners is that one off subsidies may negatively affect long run adoption through reference dependence people might anchor around the subsidized price and be unwilling to pay more for the product later but for experience goods one off subsidies could also boost long run adoption through learning this paper uses data from a two stage randomized pricing experiment in kenya to estimate the relative importance of these effects for a new improved antimalarial bed net reduced form estimates show that a one time subsidy has a positive impact on willingness to pay a year later inherit to separately identify the learning and anchoring effects we estimate a parsimonious experience good model estimation results show a large positive learning effect but no anchoring we black then discuss the types of products and the contexts inherit for which these results may apply

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

experimental evidence on the drivers of index based livestock insurance demand in southern ethiopia while index based microinsurance has attracted considerable attention uptake rates have been weak in many low income countries we explore the purchase patterns of index based livestock insurance in southern ethiopia focusing on the role of accurate product comprehension and price we find that randomly distributed learning kits improve subjects knowledge of the products however we do not find strong evidence that the improved knowledge per se causes greater insurance uptake we also find that reduced price due to randomly distributed discount coupons has an immediate positive impact on uptake without dampening subsequent period demand due to reference dependence associated with price anchoring effects

on the effectiveness of uniform subsidies in increasing market consumption we study the problem faced by a central planner trying to increase the consumption of a good such as new malaria drugs in africa the central planner allocates subsidies to its producers subject to a budget constraint and endogenous market response the policy most commonly implemented in practical applications of this problem is uniform in the sense that it allocates the same per unit subsidy to every firm primarily because of its simplicity and perceived fairness surprisingly we identify sufficient conditions of the firms marginal costs such that uniform subsidies are optimal even if the firms efficiency levels are arbitrarily different moreover this insight is usually preserved even if the central planner is uncertain about the specific market conditions further in many cases uniform subsidies simultaneously attain the best social welfare solution additionally simulation results in relevant settings where uniform subsidies are not optimal suggest that they induce a nearly optimal market

learning misallocation and technology adoption evidence from new malaria therapy in tanzania i study how the misallocation of new technology to individuals who have low ex post returns to its use affects learning and adoption behavior i focus on antimalarial treatment which is frequently over prescribed in many low income country contexts where diagnostic tests are inaccessible i show that misdiagnosis reduces average therapeutic effectiveness because only a fraction of adopters actually have malaria and slows the rate of social learning due to increased noise i use data on adoption choices the timing and duration of fever episodes and individual blood slide confirmations of malarial status from a pilot study for a new malaria therapy in tanzania to show that individuals whose reference groups experienced fewer misdiagnoses exhibited stronger learning effects and were more likely to adopt

one off subsidies and long run adoption experimental evidence on improved cooking stoves in senegal free technology distribution can be an effective development policy instrument if market driven adoption is socially inefficient and hampered by affordability constraints yet policy makers often oppose free distribution arguing that reference dependence lowers the willingness to pay wtp and thus market potentials in the long run for improved cookstoves this paper studies the wtp six years after a randomized one time free distribution in 2009 we demonstrate that the cookstoves were intensely used by the treatment group households in the years after randomization until they reached their designated lifetime using a real purchase offer we find that both treatment and control households reveal a remarkably high wtp in 2015 the estimated confidence interval suggests that we can exclude a substantial negative effect on the treatment group the policy implication is that one time free distribution does not necessarily undermine future market establishment and thus can be an effective policy instrument if rapid dissemination is the objective

trends and random walks in macroeconomic time series a re examination in their 1982 article c r nelson and c i plosser provided evidence supporting the existence of an autoregressive unit root in a variety of macroeconomic time series the author reexamines their evidence using small sample distributions for various unit root test statistics these distributions are calculated from specific null and alternative models including median unbiased models that correct for ols coefficient bias estimated from the data contrary to earlier assertions the null and alternative models of many macroeconomic series provide very different characterizations of persistence but cannot be distinguished with unit root tests copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

estimating individual discount rates in denmark a field experiment we estimate individual discount rates with respect to time streams of money using controlled laboratory experiments these discount rates are elicited by means of field experiments involving real monetary rewards the experiments were carried out across denmark using a representative sample of 268 people between 19 and 75 years of age individual discount rates are estimated for various households differentiated by socio demographic characteristics such as income and age our conclusions are that discount rates are constant over the 12 month to 3 year horizons used in these experiments and that discount rates vary substantially with respect to several socio demographic variables hence we conclude that it would be reasonable to assume constant discount rates for specific household types but not the same rates across all households

coherent arbitrariness stable demand curves without stable preferences economic theories of valuation generally assume that prices of commodities and assets are derived from underlying fundamental values for example in finance theory asset prices are believed to reflect the market estimate of the discounted present value of the asset s payoff stream in labor theory the supply of labor is established by the tradeoff between the desire for consumption and the displeasure of work finally and most importantly for this chapter consumer microeconomics assumes that the demand curves for consumer products chocolates cds movies vacations drugs and so forth can be ultimately traced to the valuation of pleasures that consumers anticipate receiving from these products because it is difficult as a rule to measure fundamental values directly empirical tests of economic theory typically examine whether the effects of changes in circumstances on valuations are consistent with theoretical prediction for example whether labor supply responds appropriately to a change in the wage rate whether compensated demand curves for commodities are downward sloping or whether stock prices respond in the predicted way to share repurchases however such comparative static relationships are a necessary but not sufficient condition for fundamental valuation e g summers 1986 becker 1962 was perhaps the first to make this point explicitly when he observed that consumers choosing commodity bundles randomly from their budget set would nevertheless produce downward sloping demand curves

mistake 37 the effect of previously encountered prices on current housing demand based on contrast effects studies from psychology we predicted that movers arriving from more expensive cities would rent pricier apartments than those arriving from cheaper cities we also predicted that as people stayed in their new city they would get used to the new prices and would readjust their housing expenditures countering the initial impact of previous prices we found support for both predictions in a sample of 928 movers from the psid alternative explanations based on unobserved wealth and taste and on imperfect information are ruled out

governance and the effectiveness of public health subsidies evidence from ghana kenya and uganda abstract distributing subsidized health products through existing health infrastructure could substantially and cost effectively improve health in sub saharan africa there is however widespread concern that poor governance in particular limited health worker accountability seriously undermines the effectiveness of subsidy programs we audit targeted bed net distribution programs to quantify the extent of agency problems we find that around 80 of the eligible receive the subsidy as intended and up to 15 of subsidies are leaked to ineligible people supplementing the program with simple financial or monitoring incentives for health workers does not improve performance further and is thus not cost effective in this context

using an economic experiment to estimate willingness to pay for a new maternal nutrient supplement in ghana scaling up access to supplements designed to prevent undernutrition such as new small quantity lipid based nutrient supplements sq lns may require distribution via both public channels and retail markets the viability of sq lns retail markets will hinge on household level demand we use an economic experiment to characterize initial willingness to pay wtp for a maternal sq lns product in ghana wtp is positive for most participants though below the estimated cost of production for many wtp varies depending on income assets and parity status these findings have implications for the design of public health policy and hybrid public private delivery mechanisms

if it pays it stays can agribusiness internalize the benefits of malaria control might a malaria control intervention entail agricultural effects that allow a commercial agribusiness to offset its costs the randomized allocation of 39 936 insecticide treated mosquito nets among 81 597 smallholder cotton farming households in 1 507 clusters helps evaluate this in the context of zambia s cotton outgrowing industry but despite large health impacts on treated households no impact on cotton deliveries to the agribusiness is detected with some caveats the results tend to strike a discord with recent evidence on the agricultural productivity effects of malaria control