TY - JOUR
T1 - Trouble with zero
T2 - The limits of subsidizing technology adoption
AU - Shukla, Pallavi
AU - Pullabhotla, Hemant K.
AU - Baylis, Kathy
N1 - Funding Information:
We thank Paul J. Ferraro, Ben Meiselman, Hope Michelson, and Ben Crost for their comments. We acknowledge funding from the ADM Institute for the Prevention of Postharvest Loss, University of Illinois . The study can be found in the AEA RCT Registry ( AEARCTR-0006661 ).
Funding Information:
We thank Paul J. Ferraro, Ben Meiselman, Hope Michelson, and Ben Crost for their comments. We acknowledge funding from the ADM Institute for the Prevention of Postharvest Loss, University of Illinois. The study can be found in the AEA RCT Registry (AEARCTR-0006661).
Publisher Copyright:
© 2022 Elsevier B.V.
PY - 2022/9
Y1 - 2022/9
N2 - Do users value a free technology less than one they pay for? In a two-stage randomized trial of improved grain storage technology in India, we test whether subsequent user willingness-to-pay is affected by free distribution compared to a small positive price. We find paying an initial price of zero has a strong negative effect on users’ long-run willingness-to-pay but is not associated with differences in either reported use or benefits derived from the technology. The lower valuation implies a 20 to 30 percent decrease in long-run adoption, suggesting free distribution can stifle future markets for repeat-purchase goods.
AB - Do users value a free technology less than one they pay for? In a two-stage randomized trial of improved grain storage technology in India, we test whether subsequent user willingness-to-pay is affected by free distribution compared to a small positive price. We find paying an initial price of zero has a strong negative effect on users’ long-run willingness-to-pay but is not associated with differences in either reported use or benefits derived from the technology. The lower valuation implies a 20 to 30 percent decrease in long-run adoption, suggesting free distribution can stifle future markets for repeat-purchase goods.
KW - Agricultural subsidies
KW - Reference dependence
KW - Technology adoption
KW - Zero price
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U2 - 10.1016/j.jdeveco.2022.102920
DO - 10.1016/j.jdeveco.2022.102920
M3 - Article
AN - SCOPUS:85133200534
SN - 0304-3878
VL - 158
JO - Journal of Development Economics
JF - Journal of Development Economics
M1 - 102920
ER -