1921
Volume 97, Issue 1
  • ISSN: 0002-9637
  • E-ISSN: 1476-1645

Abstract

Abstract.

Household water treatment can reduce diarrheal morbidity and mortality in developing countries, but adoption remains low and supply is often unreliable. To test effects of marketing strategies on consumers and suppliers, we randomized 1,798 households in rural Haiti and collected data on purchases of a household chlorination product for 4 months. Households received randomly selected prices ($0.11–$0.56 per chlorine bottle), and half received monthly visits from sales agents. Each $0.22 drop in price increased purchases by 0.10 bottles per household per month ( < 0.001). At the mean price, each 1% drop in price increased purchases by 0.45% (elasticity = 0.45). There is suggestive evidence that household visits by some sales agents increased purchases at mid-range prices; however, the additional revenue did not offset visit cost. Choosing the lowest price and conducting visits maximizes chlorine purchase, whereas slightly raising the retail price and not conducting visits maximizes cost recovery. For the equivalent cost, price discounts increase purchases 4.2 times as much as adding visits at the current retail price. In this context, price subsidies may be a more cost-effective use of resources than household visits, though all marketing strategies tested offer cost-effective ways to achieve incremental health impact. Decisions about pricing and promotion for health products in developing countries affect health impact, cost recovery, and cost-effectiveness, and tradeoffs between these goals should be made explicit in program design.

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2017-07-12
2018-11-14
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  • Received : 19 Oct 2016
  • Accepted : 19 Feb 2017

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