DP15809 Testing Willingness to Pay Elicitation Mechanisms in the Field: Evidence from Uganda

Author(s): Konrad B. Burchardi, Jonathan de Quidt, Selim Gulesci, Benedetta Lerva, Stefano Tripodi
Publication Date: February 2021
Keyword(s): Becker-DeGroot-Marschak, field experiment, Willingness to pay
JEL(s): C90, C93, D44, O12
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15809

Researchers frequently use variants of the Becker-DeGroot-Marschak (BDM) mechanism to elicit willingness to pay (WTP). These variants involve numerous incentive-irrelevant design choices, some of which carry advantages for implementation but may deteriorate participant comprehension or trust in the mechanism, which are well-known problems with the BDM. We highlight three such features and test them in the field in rural Uganda, a relevant population for many recent applications. Comprehension is very high, and 86 percent of participants bid optimally for an induced-value voucher, with little variation across treatments. This gives confidence for similar applications, and suggests the comprehension-expediency trade-off is mild.