Presenter- Margaret McConnell- To Charge or Not to Charge: Evidence from a Health Products Experiment in Uganda

Presenter: Margaret McConnell

Abstract: In a field experiment in Uganda, we find that demand after a free distribution of three health products is lower than after a sale distribution. This contrasts with earlier work on insecticide-treated bednets, highlighting the importance of considering product characteristics in determining pricing policy. We put forward a model to illustrate the potential tension between two 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 shifts in demand matches with the theoretical prediction, although differences are not statistically significant across all products.