Can higher prices stimulate product use?
Subtitle: evidence from a field experiment in Zambia
By: Nava Ashraf, James Berry, Jesse M. Shapiro
Contributors: Berry, James; Shapiro, Jesse; Harvard Business School
Edition: 2nd rev.
Series: Working paper / Harvard Business School -- 07-034; Working paper (Harvard Business School) -- 07-034
Publisher: Harvard Business School
Published: 2008
Place of publication: Boston]
Number of pages: 54
Description: The controversy over whether and 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 that higher prices screen out those who use the product less. By contrast, we find no consistent evidence of sunk-cost effects.
Notes: "Revised October 2008"--Publisher's website.

Includes bibliographical references.