BREAD Working Paper No. 535, February 2018

Demand for Information on Environmental Health Risk, Mode of Delivery and Behavioral Change: Evidence from Sonargaon, Bangladesh

Ricardo Maertens, Alessandro Tarozzi, Kazi Matin Ahmed, Alexander van Geen


Lack of access to reliable information on environmental exposure limits opportunities for risk-avoiding behavior, particularly in developing countries. Private markets could potentially play a role in providing such information if households cannot rely on the public sector. We describe results from a randomized controlled trial conducted in Bangladesh to determine, first, to what extent charging a modest fee for an environmental test limits demand and, second, how different modes of information delivery can affect demand for and behavioral responses to such information. In rural Bangladesh, millions of individuals are chronically exposed to arsenic by drinking contaminated water from their private well. Well tests for arsenic have previously been shown to encourage a sizeable fraction of households owning an unsafe well to switch to a safer source that, typically, is within walking distance. However, the safety status of millions of tube wells remains unknown and there is no well-established market for well tests. In our study, tests were sold under different conditions during fi eld trials conducted in 128 villages of Sonargaon sub-district, Bangladesh. At a price of BDT45 (about USD0.60), only one in four households purchased a test, despite widespread awareness about the risk of exposure to arsenic but little knowledge about the safety status of wells. Sales were not increased by "nudges" in the form of visible metal placards indicating safety status or by offers to promote the sharing of safe wells through informal agreements. However, conditional on learning about the unsafe status of one's tube well water, both informal agreements and visible placards nearly doubled the fraction of households that switched away from their contaminated well. Large increases in demand and behavioral responses were also observed with sales that required payment only in case of "good news", although this contract variation was only adopted in a subset of only 12 villages. We conclude that households should not be charged for well tests but considerably more attention should be paid to the way tests results are delivered to encourage the sharing of safe wells.

Keywords: Arsenic, Bangladesh, Environmental Health Risk

JEL classification codes: I12, I15, I18, Q53

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