Essays on Household Decision Making in Developing Countries

Download or read book Essays on Household Decision Making in Developing Countries written by James Wesley Berry and published by . This book was released on 2009 with total page 145 pages. Available in PDF, EPUB and Kindle. Book excerpt: (cont.) The effect of treated friends comes primarily from bilateral ties, where both the child and his friend indicate that they spend time with each other. The third chapter, written jointly with Nava Ashraf and Jesse Shapiro, explores how households make decisions to purchase and use health products in developing countries. This study tests 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.