Customer knowledge and the price-quality gradient
This policy brief explores how improving consumer quality discernment through information can raise demand for higher-quality products in Uganda’s furniture market, creating stronger incentives for quality upgrading among small enterprises.
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Cajal-Grossi-et-al-Policy-Brief-April-2025.pdf
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- Access to sophisticated markets in high-income countries is a fruitful pathway for firms’ quality upgrading in developing economies. However, this opportunity is limited to larger firms that can overcome entry barriers into foreign markets.
- The vast majority of micro and small enterprises in low-income countries cannot reach beyond their local markets, limiting the scale and impact of traditional market access policies for quality upgrading.
- This policy brief presents findings from a framed field experiment showing that providing information to consumers about how to assess quality can improve quality discernment. This, in turn, can increase their willingness to pay for higher-quality products in Uganda's wooden furniture market.