Information and Competition in Lemon Markets: Improving Safety in Informal Transit

Last registered on April 28, 2022
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Pre-Trial

Trial Information

General Information

Title
Information and Competition in Lemon Markets: Improving Safety in Informal Transit
RCT ID
AEARCTR-0009315
Initial registration date
April 26, 2022

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
April 28, 2022, 6:13 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Kenya
Region
Nairobi

Primary Investigator

Name
Gregory Lane
Affiliation
University of Chicago
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Erin Kelley
PI Affiliation
World Bank
PI Name
David Schonholzer
PI Affiliation
IIES

Additional Trial Information

Status
Completed
Start date
2018-09-01
End date
2019-10-31
Keywords
Firms & Productivity
Additional Keywords
Public Transit, Transit Safety, Consumer Choice, Information
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Road traffic accidents in poorly regulated public transit is a leading cause of death in low- and middle-income countries. We study how providing information about bus safety to passengers affects the demand and supply of safer public transit when firms have market power. We collect measures of safe driving for buses belonging to five firms operating at one of the busiest long-range bus stations in Nairobi, Kenya, using a newly developed tracking device. In a first experiment, we privately inform passengers approaching the station which firm is the safest choice. Passengers do not respond to the treatment, although they are willing to switch for a small subsidy. In a second experiment, we then provide a public signal to both passengers and firms that buses are now being tracked. Passengers receiving private information about bus safety now respond by choosing the safe firm, and some firms provide safer services. We rationalize these effects in a game-theoretic model of firms facing different costs of providing safe services and derive welfare estimates of alternative equilibria. The model implies that the welfare effects of information interventions crucially depend on the nature of the market equilibrium.
External Link(s)

Registration Citation

Citation
Kelley, Erin, Gregory Lane and David Schonholzer. 2022. "Information and Competition in Lemon Markets: Improving Safety in Informal Transit." AEA RCT Registry. April 28. https://doi.org/10.1257/rct.9315-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2018-10-01
Intervention End Date
2019-09-30

Primary Outcomes

Primary Outcomes (end points)
Passenger choice of bus, safety events for buses (firms)
Primary Outcomes (explanation)
We will observe which bus a passenger chooses for their trip after receiving on of our interventions. We will observe bus safety behavior from our install monitoring devices which track high-speeding, sharp braking, and average speed. We will combine these measures into an overall safety index.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We place GPS trackers in 60 buses (5 companies) operating from a popular station in downtown Nairobi and monitor instances of speeding, sharp-braking, and average speed. We then intercept over 2500 passengers as they enter the station and randomly provide them with one of two pamphlets. The first pamphlet reminds passengers of the importance of safe driving in general. The second pamphlet displays which bus company was awarded the top safety performer title that month, based on the monitoring data. To determine passengers demand for safety, we also randomly offer a “subsidy treatment” that gives passengers incentives for taking the safest bus. Finally, half way through the experiment we positioned large signs across the station to advertise our pamphlets and tracking efforts publicly for both firms and passengers.
Experimental Design Details
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Individual (passenger)
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
2500 passengers
Sample size: planned number of observations
2500 passengers
Sample size (or number of clusters) by treatment arms
2500 passengers
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials