PerspectiveEconomics

Hassles versus prices

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Science  26 Aug 2016:
Vol. 353, Issue 6302, pp. 864-865
DOI: 10.1126/science.aah5055

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Summary

Suppose that a government or NGO has a valuable health product, such as bed nets to prevent infection by malarial mosquitoes or hand soap to prevent the spread of disease. It wants to distribute this product to those who need it, but not everyone needs or will use the product. Thus, if the organization gives the product away for free, a substantial amount may be wasted. On page 889 of this issue, Dupas et al. show that introducing small hassles, such as visiting a store each month to redeem a voucher, can be a much more effective way of reducing wastage than charging for the product (1).