Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
Short‐run subsidies for health products are common in poor countries. How do they affect long‐run adoption? A common fear among development practitioners is that one‐off subsidies may negatively affect long‐run adoption through reference‐dependence: People might anchor around the subsidized price and be unwilling to pay more for the product later. But for experience goods, one‐off subsidies could also boost long‐run adoption through learning. This paper uses data from a two‐stage randomized pricing experiment in Kenya to estimate the relative importance of these effects for a new, improved antimalarial bed net. Reduced form estimates show that a one‐time subsidy has a positive impact on willingness to pay a year later. To separately identify the learning and anchoring effects, we estimate a parsimonious experience‐good model. Estimation results show a large, positive learning effect but no anchoring. We then discuss the types of products and the contexts for which these results may apply.