To Charge or Not to Charge: Pricing Health Products in Northern Uganda

Last registered on July 20, 2016

Pre-Trial

Trial Information

General Information

Title
To Charge or Not to Charge: Pricing Health Products in Northern Uganda
RCT ID
AEARCTR-0001414
Initial registration date
July 20, 2016
Last updated
July 20, 2016, 8:24 AM EDT

Locations

Region

Primary Investigator

Affiliation
Northwestern University

Other Primary Investigator(s)

PI Affiliation
Yale University
PI Affiliation
Harvard School of Public Health
PI Affiliation
London School of Economics

Additional Trial Information

Status
Completed
Start date
2011-10-01
End date
2011-12-31
Secondary IDs
Abstract
In a field experiment in Uganda, a free distribution of three health products lowers subsequent demand relative to a sale distribution. This contrasts with work on insecticide-treated bed nets, highlighting the importance of product characteristics in determining pricing policy. We put forward a model to illustrate the potential tension between two of these important factors, learning and anchoring, and then test this model with three products selected specifically for their variation in the scope for learning. We find the rank order of percentage change of shifts in demand matches theoretical predictions, although the differences are not statistically significant, and only two of three pairwise comparisons match when the reductions are specified in percent terms. These results highlight the importance of understanding pricing policy with respect to product, market, and household characteristics.
External Link(s)

Registration Citation

Citation
, et al. 2016. "To Charge or Not to Charge: Pricing Health Products in Northern Uganda." AEA RCT Registry. July 20. https://doi.org/10.1257/rct.1414-1.0
Former Citation
, et al. 2016. "To Charge or Not to Charge: Pricing Health Products in Northern Uganda." AEA RCT Registry. July 20. https://www.socialscienceregistry.org/trials/1414/history/9473
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2011-10-01
Intervention End Date
2011-12-31

Primary Outcomes

Primary Outcomes (end points)
Demand in Wave 1 by Product: (Panadol, Elyzole, Zinkid)

- Take-Up

- Quantity

Demand in Wave 2 by Product: (Panadol, Elyzole, Zinkid, Aquasafe)

- Product same as in Wave 1?
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
This project sought to evaluate the tension between two important factors, learning and anchoring, in determining the demand for health products in less-developed countries, and help settle the debate in the development aid community over the pricing of these products. A field experiment in northern Uganda was designed where health products were distributed door-to-door either for free or for sale at market prices. Three products were offered that differed in their scope for learning: Panadol, a pain reliever widely known to consumers and for which no scope for learning was expected; Elyzole, a deworming drug that was moderately well-known and for which negative learning due to side effects was expected; and Zinkid, an improved treatment for childhood diarrhea that was largely unknown and for which positive learning was expected. Approximately ten weeks after the initial distribution, representatives from an unrelated, for-profit firm offered the households either the same or a new health product for sale at market prices. The key outcome measure is households’ purchase decisions in this second distribution.
Experimental Design Details
Randomization Method
The first wave of marketing (Wave 1), conducted in October-November 2011, employed a two-level clustered randomization design,
with randomization both at the village and individual level. First, villages were randomly assigned to one of four treatment groups in a two-by-two design. The first treatment dimension was the price of the product, either free (“Free”) or sold
(“Sale”). The second dimension was the type of distributing organization: either a not-for-profit, non-governmental organization (“NGO”) or a for-profit business (“For-Profit”). Thirty villages were assigned to each of the four treatment cells.
Then, at the household level, one of three products was randomly assigned to be offered to each household: Panadol (paracetamol, a painkiller), Elyzole (albendazole,a deworming medication), and a combination pack of Restors and Zinkid (oral
rehydration salts, “ORS” and zinc supplements, the World Health Organization’s recommended treatment for childhood diarrhea). For the Sale treatment group, the same price was used for the entire study.
Randomization Unit
villages, households (randomization was conducted at both the village and individual level)
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
120 villages

Sample size: planned number of observations
5,707 households
Sample size (or number of clusters) by treatment arms
33% of households offered a given product in Wave 1

25% of households offered a given product in Wave 2
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Innovations for Poverty Action Institutional Review Board
IRB Approval Date
2011-05-01
IRB Approval Number
487.11May-001
IRB Name
Yale Human Research Protection Program
IRB Approval Date
2011-08-01
IRB Approval Number
1105008448

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
December 31, 2011, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
December 31, 2011, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
120 villages
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
3,879 households found in first wave of marketing of the original 5,707 households identified to be in study.

Of the 3,879 individuals treated in Wave 1, 2,887 were found in Wave 2.
Final Sample Size (or Number of Clusters) by Treatment Arms
33% of households received a given product
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
In a field experiment in Uganda, a free distribution of three health products low- ers subsequent demand relative to a sale distribution. This contrasts with work on insecticide-treated bed nets, highlighting the importance of product characteristics in determining pricing policy. We put forward a model to illustrate the potential ten- sion between two of these important factors, learning and anchoring, and then test this model with three products selected specifically for their variation in the scope for learning. We find the rank order of percentage change of shifts in demand matches theoretical predictions, although the differences are not statistically significant, and only two of three pairwise comparisons match when the reductions are specified in percent terms. These results highlight the importance of understanding pricing policy with respect to product, market, and household characteristics.
Citation
Fischer, Greg, Dean Karlan, Margaret McConnell, and Pia Raffler. “To Charge or Not to Charge: Evidence from a Health Products Experiment in Uganda. Working Paper June 2016.

Reports & Other Materials