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Christopher Roth - Research Summary

Bocconi University

Estimating the Demand for an Entrepreneurship Program

We conduct a randomized experiment with entrepreneurs in Jamaica to estimate their demand for an entrepreneurship program. For a sample of informal entrepreneurs we elicit participants’ willingness to pay (WTP) using multiple price lists. One of the choices is randomly selected, which generates random variation on take up of the program and price paid. The goal of this project is to understand whether it can be desirable to charge a positive price for entrepreneurship programs. First, we study whether a positive price can act as a screening device to select innovative entrepreneurs for participation in training programs. Second, we test whether there is a sunk cost effect by which those who pay a higher price for the program exercise more effort and achieve higher returns. Finally, we estimate the demand schedule for the program to determine whether by charging a small positive price, we would restrict access to a significant group of people who would benefit from the program. This project is relevant to understand whether we can increase the effect of entrepreneurship programs by targeting, and whether providers of entrepreneurship programs can achieve financial sustainability.