Trouble with zero: The limits of subsidizing technology adoption

A-Tier
Journal: Journal of Development Economics
Year: 2022
Volume: 158
Issue: C

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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.

Technical Details

RePEc Handle
repec:eee:deveco:v:158:y:2022:i:c:s0304387822000773
Journal Field
Development
Author Count
3
Added to Database
2026-01-29