Wednesday, December 27, 2006

Volte-face netting 

After posting on Felix Salmon's point yesterday about the benefits of having the poor pay a nominal amount for mosquito netting, I see this morning that he's changed his mind, based on some evidence.

Curious! The point of having the poor pay isn't to say that they only take care of things for which they pay. What you want to find are incentives that line up between the donor and the recipient. We give mosquito netting to stop the spread of malaria; the poor who buy nets might not use them for that purpose. Indeed, given they've paid for them, they may feel no obligation to use it as intended. If I have Littlest buy a golf club from me for $1 she may use it to, say, chase Buttercup around the house. If I spend $200 on a nice driver and tell her to use it to learn golf, the expenditure might put some obligation on her to make the right use of the club.

Salmon argues that the donor and recipient both want the same thing: to prevent mosquito bites. Thus their incentives align. But why would the expenditure of fifty cents, say, change the recipients' preferences for how to use the net? Salmon doesn't say, and I can't see that either. But neither can I explain the paper's finding of greater use of free nets.