It’s all Fun and Games? The Persistent Effects of Willingness to Pay Experiments TBC

Written with Brian Dillon (Cornell University), Leticia Donoso-Pena (Tufts University), and Anne Krahn (Tufts University)

Willingness-to-pay (WTP) experiments have been widely used to assess demand for a variety of products. Yet can they also generate persistent impacts on adoption and welfare? We answer this question using a randomized controlled trial of a baseline WTP experiment, combined with in-person and phone survey data over a four-year period. We find that a WTP experiment leads to positive and persistent effects on adoption and usage of an improved storage technology, resulting in significantly less pesticide use and fewer storage losses after three years. These results are primarily driven by those households who were able to experience the product. The experiment also leads to positive spillovers on neighbouring households. However, unlike other studies, it does not crowd-in market demand for the product after three years.