Microcredit and willingness to pay for environmental quality: Evidence from a randomized-controlled trial of finance for sanitation in rural Cambodia |
| |
Institution: | 1. William and Mary, USA;2. IDinsight, USA;3. North Carolina State University, USA;4. IFPRI, USA;5. Yale Law School, USA |
| |
Abstract: | Low willingness to pay (WTP) for environmental quality in developing countries is a key research question in environmental economics. One explanation is that missing credit markets may suppress WTP for environmental improvements that require large up-front investments. We test the impact of microloans on WTP for hygienic latrines via a randomized controlled trial in 30 villages in rural Cambodia. We find that microcredit dramatically raises WTP for improved latrines, with 60% of households in the Financing arm willing to purchase at an unsubsidized price, relative to 25% in the Non-financing arm. Effects on latrine installation are positive but muted by several factors, including a negative peer effect: randomly induced purchases by neighbors reduce a household's probability of installing its own latrine. On methodological grounds, this paper shows that a “decision-focused evaluation” can be integrated into academic analysis to provide insight into questions of general interest. |
| |
Keywords: | Sanitation Microcredit Becker-DeGroot-Marschak Randomization inference Decision-focused evaluation |
本文献已被 ScienceDirect 等数据库收录! |
|