Seminar
Renate Hartwig: Eliciting the Willingness to Pay for Eyeglasses
In this paper, we assess the willingness to pay for eyeglasses in rural Burkina Faso. We use a variant of the Becker-DeGroot-Marschak (BDM) method to elicit the willingness to pay for glasses, comparing the effect of an educational video and deferred payment on the willingness to pay.
Theory and Evidence from rural Burkina Faso
The willingness to pay for glasses in rural areas is 20% of the current market price. Despite households being cash constraint, deferred payment does not increase the willingness to pay. In contrast, the video has a positive effect and raises the willingness to pay for corrective glasses by 14%. We develop a theoretical explaining the positive effect of the video and the rejection of time payments. With the willingness to pay below the market price a subsidy free market for the product in this population would not be viable if widespread penetration is the objective.