Ideas for growth session 4: Climate Change
Greg Fischer (LSE) presented on research using the Becker–DeGroot–Marschak method (BDM) to accurately estimate willingness to pay (WTP) for water filters in Ghana. The BDM is useful as it gets at the critical point of whether people will treat a good differently if they paid for it or not. The research compared the BDM to a ‘take-it-or-leave-it’ offer in order to directly estimate demand and also to estimate the effect of an AfriClay water filter. The BDM was better than a ‘take-it-or-leave-it’ mechanism because it provides much more precise information on WTP, and also lets us know more accurately how much different individuals benefit from the filter through a reduction in reported diarrhoea.
Susan Murcott (MIT), founder of Pure Home Water, an NGO founded in 2005 to provide safe household water in Ghana using AfriClay water filters, responded to Fischers’s presentation. The filters are given away for free via UNICEF, but sold for GHS 5 via Rotary. Murcott had two key questions: Should they charge at all, or if they should charge, at which price? Based on Fischer et al’s results it appears that GHS 3.5 may be the optimal price to charge to obtain a 25% reduction in diarrhoea. The discussion emphasised the critical importance of real-world experimentation to avoid the biases of the lab.
Mushfiq Mobarak (Yale) presented on communicating with farmers about the adoption of sustainable farming technologies, such as pit planting and compost application, which remain low in many African countries despite demonstrated large gains. The Malawi-based research focused on information failures and the use of social networks, such as interactions between farmers, as a persuasive source of information. The results of a survey of 4200 households in 168 villages show that incentives matter a lot to technology communication (farmers needed to have been given an incentive to initially learn about, retain over time, and then transmit the information to others). Poor farmers respond most strongly to incentives and female farmers respond more than male farmers. The research also concludes that there is a role for external agents to intervene in the process of learning, as information transmission is not automatic, especially about entirely new technologies.
Audio is unavailable for this session.