The Combined Role of Subsidy and Discussion Intervention in the Demand for a Stigmatized Product

Abstract

Abstract This paper studies the joint role of subsidization and group discussion intervention in increasing the demand for sanitary pads—a product that is widely available but demand for which may be curtailed due to the psychological cost associated with menstrual stigmatization. The study deploys a field experiment in Nepal to randomly allocate discount coupons of various values so that participants face exogenous variation in the effective price of sanitary pads. In addition, a randomly selected group of women in the sample participate in menstrual-health-related group discussion intervention. The findings suggest that an increase in subsidy level increases the probability of adoption across both groups of women—those receiving only a subsidy and those participating in the discussion intervention coupled with a subsidy. Also, women participating in the discussion intervention have a higher adoption rate. The effects of group discussion intervention are concentrated among women with high psychological cost, whose purchase decisions are more likely to be affected by societal stigma. The results suggest that combining a subsidy with group discussion could provide a cost-effective strategy to increase the adoption of health technology, the demand for which is constrained by social norms.