Do people invest in local public goods with long-term benefits: Experimental evidence from a shanty town in Peru

Thomas Hoop, Luuk Van Kempen and Ricardo Fort ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper discusses voluntary contributions to health education in a shanty town in Peru, using a new experimental setup to identify voluntary contributions to local public goods. The experiment enables individuals to contribute to a health education meeting facilitated by an NGO, which they know will only be organised if the cumulative investment level exceeds a certain threshold value. In contrast to expectations of aid distributors, individuals contributed a substantial amount of money, despite the long-term nature of the health benefits from health education. High discount rates only seem to have had a detrimental effect on investment in a poorer subsample. Results from a complementary experiment, which identifies donations to a nutrition program, suggest that positive beliefs about short-term benefits from health education in the form of learning effects have played an important role in the investment decision. The results indicate that channelling decision-making power about public good provision to beneficiaries not necessarily implies a crowding out of investment in local public goods with long-term benefits. Hence, particular attention is given to the potential role of cash transfers in the financing of local public goods.

Keywords: Health education; Field Experiment; Public Good; Peru (search for similar items in EconPapers)
JEL-codes: C93 H41 I1 (search for similar items in EconPapers)
Date: 2010-07
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Do people invest in local public goods with long-term benefits? Experimental evidence from a shanty town in peru (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:24968

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