Learning is in the Air: Clean Air as an Experience Good
Accepted, Journal of Development Economics Pre-Results Review · AEA RCT Registry No. 0013110
Abstract
Despite the severe health risks posed by air pollution, demand for cleaner air remains slow in many highly polluted developing regions. One potential explanation is that clean air functions as an experience good: where personal demand becomes evident only after consuming cleaner air. We provide the first experimental test of clean air as an experience good by randomly assigning households in Jakarta, Indonesia to a three-month air purifier rental. Our findings reveal that purifier rentals effectively reduced indoor PM2.5 concentrations by 33%, demonstrating that the intervention successfully exposed households to clean air. Households that experienced cleaner air felt the purifiers improved their health, and developed stronger beliefs about the benefits of clean air. The treatment increased WTP for air purifiers, but only among households with above-median income, suggesting that financial constraints limit demand despite learning effects.
Draft available upon request.