The best price for bed nets

I just started reading an article in the May 17 edition of The New Yorker which figures to produce a policy change by Karimu. We’re confident that before our next visit to the Tanzanian village of Bacho, this August, we can come up with enough money to buy antimalarial bed nets for all the villagers. (I probably shouldn’t say “we” since Linda Miller, one of three doctors making the trip with us this summer, has taken personal responsibility for raising all the money for the nets.) We had planned to sell the nets to the villagers for perhaps fifty cents each, not in order to defray the cost to Karimu—roughly $6.30 per net—but on the seemingly common-sense assumption that the villagers would place greater value on something they must buy than on something given to them for free.

Selling the nets was my own idea, derived from a passage in the NYU development economist William Easterly’s 2006 book, The White Man’s Burden. Easterly writes that bed nets given away for free often go to people who have no interest in protection from malaria: even if you don’t want a bed net, why not accept it if it costs nothing, after all? Thus bed nets get used as, say, fishing nets or bridal veils. However, Easterly also reports that an NGO in one of the sub-Saharan countries tried selling bed nets at far below cost and saw a dramatic rise in their intended use. Easterly’s anecdotal evidence of the wisdom of charging for nets appeared, as I’ve already suggested, to agree with common sense, so he persuaded me.

But of course common sense supports just as convincingly the assumption that people living in extreme poverty will value every penny and hence value anything free, like a bed net, which enables them to spend their few pennies on other valuable things—like food, since many very poor people experience chronic hunger. The indecisiveness of common sense explains why scientists prefer the evidence of experiments.

This takes us to the profile in The New Yorker of MIT development economist Esther Duflo. Duflo co-founded MIT’s Abdul Latif Jameel Poverty Action Lab (J-PAL), a prolific source of randomized experiments in development economics. The New Yorker piece mentions a randomized study done in Kenya by a colleague of Duflo’s, which found the “best price for bed nets was free.” The results of the study appear at http://www.povertyactionlab.org/sites/default/files/publications/55_Dupas_Free_Distribution_or_Cost-Sharing.pdf. I have to admit I’ll need time to digest the article’s forty dense pages. But authors Jessica Cohen and Pascaline Dupas claim in their abstract that ITN [insecticide-treated net] use “drops by 60 percentage points when the price. . . increases from zero to $0.60”!

I don’t mean this as our last word, but at least for now Karimu will plan to charge the people of Bacho nothing for the bed nets we shall buy them.—Don Stoll

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About Don Stoll

Don and his wife, Marianne Kent-Stoll, are co-founders of the Karimu International Help Foundation. They established Karimu in 2008 at the request of the people of Dareda Kati Village, in the Manyara Region of northeastern Tanzania. Karimu is devoted to working with the residents of Dareda Kati in order to satisfy their development needs, as defined by the villagers themselves.
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