Ordeal Mechanisms, Information, and the Cost-Effectiveness of Subsidies: Evidence from Subsidized Eyeglasses in Rural China

Sean Sylvia; Xiaochen Ma; Yaojiang Shi; Scott Rozelle; C. -Y. Cynthia Lin Lawell

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arXiv · 1812.00383

Ordeal Mechanisms, Information, and the Cost-Effectiveness of Subsidies: Evidence from Subsidized Eyeglasses in Rural China

Sean Sylvia·Xiaochen Ma·Yaojiang Shi·Scott Rozelle·C. -Y. Cynthia Lin Lawell

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Abstract

The cost-effectiveness of policies providing subsidized goods is often compromised by limited use of the goods provided. Through a randomized trial, we test two approaches to improve the cost-effectiveness of a program distributing free eyeglasses to myopic children in rural China. Requiring recipients to undergo an ordeal better targeted eyeglasses to those who used them without reducing usage relative to free delivery. An information campaign increased use when eyeglasses were freely delivered but not under an ordeal. Free delivery plus information was determined to be the most socially cost-effective approach and obtained the highest rate of eyeglass use.

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Sean Sylvia, Xiaochen Ma, Yaojiang Shi, Scott Rozelle, C. -Y. Cynthia Lin Lawell. 2018-12-02. Ordeal Mechanisms, Information, and the Cost-Effectiveness of Subsidies: Evidence from Subsidized Eyeglasses in Rural China. https://arxiv.org/abs/1812.00383

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