On insecticide-treated bed nets (ITNs), at least. There has been an ongoing battle between Sachs and segments of the global public health community on the appropriate delivery mechanisms for ITNs. The efficacy of ITNs in preventing malaria exposure is not in question. What has been debated is whether ITNs should be distributed free (the Sachs position) or at a positive, albeit subsidized price. Those who favor the latter argue, in part, that charging a fee makes the program more sustainable and that it reduces wastage from giving away the nets to those who do not need or will not use it. See the arguments here (gated, unfortunately).
A new randomized experiment carried out by Jessica Cohen and Pascaline Dupas reaches striking and unambiguous results:
Taken together, our results suggest that cost-sharing ITN programs may have difficulty reaching a large fraction of the populations most vulnerable to malaria. Since the drop in demand induced by higher prices is not offset by increases in usage, the level of coverage induced by cost-sharing is likely to be too low to achieve the strong social benefits that ITNs can confer. When we combine our estimates of demand elasticity and usage elasticity in a model of cost-effectiveness that incorporates both private and social benefits of ITNs on child mortality, we find that for reasonable parameters, free distribution is more cost-effective than partial-but-still-highly subsidized distribution such as the cost-sharing program for ITNs that is currently underway in Kenya. We also find that, for the full range of parameter values, the number of infant lives saved is highest when ITNs are distributed free.
Finally, we do not find that free distribution generates higher leakage of ITNs to non-intended beneficiaries. To the contrary, we observed more leakage and theft (by clinic staff) when ITNs were sold at a higher price. We also did not observe any second-hand market develop in areas with free distribution. Among both buyers and “recipients” of ITNs, the retention rate was above 90 percent.
This is randomized experiments at its best: it addresses an important policy question and significantly changes (or should change) our priors on it.
UPDATE: Mead Over takes issue with my headline. Homework question for development students: Can randomized experiments ever settle an important policy question?