Imagine you are walking along a wide sidewalk downtown Your City, USA.  In front of you and to the left you spot a table.  People are handing out vitamin supplement samples… for free. Do you take one?

A block later, you encounter another table set up.  It’s a different group, but also handing out vitamin supplements for a small fee – say $0.25 for a mini bottle.  Do you buy one?

Now, guess which table was more successful at encouraging people to try vitamin supplements?

A recent Fast Company article citing a similar experiment conducted by J-PAL has created a bit of a stir in the social enterprise blogosphere this last week.  First, BOPreneur Paul Hudnut wrote a very thoughtful and somewhat provocative post titled, “Is It Right to Have the Poor Pay?”  Shortly after, Francisco Noguera at NextBillion posted this equally interesting response to Hudnut’s comments.

The Fast Company article concluded that J-PAL’s experiment, which demonstrated that free mosquito nets were more widely adopted than paid-for nets, had proven false the widely-held belief that it’s right to have the poor pay small fees for development-related goods and services because doing so encourages a sense of ownership.

Really?

Hudnut’s post makes the great point that, while it may not always be appropriate to have the poor pay, “charity doesn’t scale.”   Noguera agrees that “free” sometimes is the best approach, even though market-based approached are generally preferable.  He also remarks on how cross-subsidies can make the latter possible within a social enterprise model.  Both make wonderful points.

But what about the simple fact that “free” is virtually ALWAYS going to be preferable to consumers!  Especially when the alternative is a small fee.

I haven’t read the J-PAL study cited in the Fast Company article, but if it’s as straightforward as it sounds, the outcome should be no surprise to anyone.

The real question is not, “To free or not to free?”  The real question is, Do you measure success by how many mosquito nets you hand out?

If so, maybe free is best. But I’d prefer to measure success based on what % of people are using their mosquito nets six months later.  Or perhaps the % of mosquito nets that are still effective (i.e. in good shape) after 12 months.  Or the change in the number of new malaria cases in the community after 3 years.  If these are the outcomes you’re trying to impact, maybe selling them a mosquito net at a small fee still is the best solution.

Which brings me to my real point here.  Businesses frequently have to create markets and stimulate demand through consumer education and advertising (though internet startups are increasingly doing this through free).  With effort, they get people to value their product enough to pay for it.  Should international development be any different?

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