Estimating the Demand for Business Training : Evidence from Jamaica

Business training programs are typically offered for free. Charging for training provides potential benefits including financial sustainability, but little is known about how price affects the demand for training. This study conducted two experimen...

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Main Authors:	Maffioli, Alessandro, McKenzie, David, Ubfal, Diego
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	ENTREPRENEURSHIP EDUCATION BUSINESS TRAINING SMALL AND MEDIUM SIZE ENTERPRISE AFRICA GENDER POLICY GENDER INNOVATION LAB FEMALE ENTREPRENEURS DEMAND ELICITATION PRICING SERVICES TAKE-UP WOMEN AND PRIVATE SECTOR DEVELOPMENT
Online Access:	http://documents.worldbank.org/curated/en/687501600969435877/Estimating-the-Demand-for-Business-Training-Evidence-from-Jamaica http://hdl.handle.net/10986/34553

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recordtype	oai_dc
spelling	okr-10986-345532022-09-20T00:10:59Z Estimating the Demand for Business Training : Evidence from Jamaica Maffioli, Alessandro McKenzie, David Ubfal, Diego ENTREPRENEURSHIP EDUCATION BUSINESS TRAINING SMALL AND MEDIUM SIZE ENTERPRISE AFRICA GENDER POLICY GENDER INNOVATION LAB FEMALE ENTREPRENEURS DEMAND ELICITATION PRICING SERVICES TAKE-UP WOMEN AND PRIVATE SECTOR DEVELOPMENT Business training programs are typically offered for free. Charging for training provides potential benefits including financial sustainability, but little is known about how price affects the demand for training. This study conducted two experiments in Jamaica using the Becker-DeGroot-Marschak mechanism and take-it-or-leave-it offers to estimate the demand for training. Most entrepreneurs have a positive willingness to pay for training, but demand falls sharply as price increases: in the Becker-DeGroot-Marschak experiment, 76 percent of the entrepreneurs attend training when it is free, but only 43 percent attend when they are charged one-quarter of the cost, and only 11 percent when charged the full cost. Providing a credit option did not increase willingness to pay. Higher prices screen out poorer, older, and more risk-averse business owners, and those who expect to benefit less from training and have a low value of sales. However, charging a higher price increases attendance among those who pay, suggesting a psychological effect where paying for training makes firms value it more. 2020-10-01T17:23:32Z 2020-10-01T17:23:32Z 2020-09 Working Paper http://documents.worldbank.org/curated/en/687501600969435877/Estimating-the-Demand-for-Business-Training-Evidence-from-Jamaica http://hdl.handle.net/10986/34553 English Policy Research Working Paper;No. 9415 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Jamaica
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ENTREPRENEURSHIP EDUCATION BUSINESS TRAINING SMALL AND MEDIUM SIZE ENTERPRISE AFRICA GENDER POLICY GENDER INNOVATION LAB FEMALE ENTREPRENEURS DEMAND ELICITATION PRICING SERVICES TAKE-UP WOMEN AND PRIVATE SECTOR DEVELOPMENT
spellingShingle	ENTREPRENEURSHIP EDUCATION BUSINESS TRAINING SMALL AND MEDIUM SIZE ENTERPRISE AFRICA GENDER POLICY GENDER INNOVATION LAB FEMALE ENTREPRENEURS DEMAND ELICITATION PRICING SERVICES TAKE-UP WOMEN AND PRIVATE SECTOR DEVELOPMENT Maffioli, Alessandro McKenzie, David Ubfal, Diego Estimating the Demand for Business Training : Evidence from Jamaica
geographic_facet	Latin America & Caribbean Jamaica
relation	Policy Research Working Paper;No. 9415
description	Business training programs are typically offered for free. Charging for training provides potential benefits including financial sustainability, but little is known about how price affects the demand for training. This study conducted two experiments in Jamaica using the Becker-DeGroot-Marschak mechanism and take-it-or-leave-it offers to estimate the demand for training. Most entrepreneurs have a positive willingness to pay for training, but demand falls sharply as price increases: in the Becker-DeGroot-Marschak experiment, 76 percent of the entrepreneurs attend training when it is free, but only 43 percent attend when they are charged one-quarter of the cost, and only 11 percent when charged the full cost. Providing a credit option did not increase willingness to pay. Higher prices screen out poorer, older, and more risk-averse business owners, and those who expect to benefit less from training and have a low value of sales. However, charging a higher price increases attendance among those who pay, suggesting a psychological effect where paying for training makes firms value it more.
format	Working Paper
author	Maffioli, Alessandro McKenzie, David Ubfal, Diego
author_facet	Maffioli, Alessandro McKenzie, David Ubfal, Diego
author_sort	Maffioli, Alessandro
title	Estimating the Demand for Business Training : Evidence from Jamaica
title_short	Estimating the Demand for Business Training : Evidence from Jamaica
title_full	Estimating the Demand for Business Training : Evidence from Jamaica
title_fullStr	Estimating the Demand for Business Training : Evidence from Jamaica
title_full_unstemmed	Estimating the Demand for Business Training : Evidence from Jamaica
title_sort	estimating the demand for business training : evidence from jamaica
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/687501600969435877/Estimating-the-Demand-for-Business-Training-Evidence-from-Jamaica http://hdl.handle.net/10986/34553
_version_	1764481148040249344

Estimating the Demand for Business Training : Evidence from Jamaica

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