Willingness-to-Pay for LNS Products: Evidence from the iLiNS Studies

Abstract

Objectives: Households’ stated willingness-to-pay (WTP) for small-quantity lipid-based nutrient supplements (LNS) influence the economic viability of retail outlets for these products, and will guide public policy action when WTP falls short of LNS production/distribution costs.  This presentation provides evidence on WTP for LNS products tested in the context of the International Lipid-Based Nutrient Supplements (iLiNS) Project in Malawi, Ghana and Burkina Faso. Methods: Field-based contingent valuation methods provide estimates of WTP for LNS for pregnant/lactating women (LNS-P&L) and for children 6-24 mo of age (LNS-child), and for their traditional alternatives.  Experimental auctions provide incentive-compatible estimates of WTP for LNS-P&L (Ghana) and for LNS-child (Burkina Faso). Results: Average hypothetical WTP at baseline for LNS-child (one 20g sachet) was approximately US$0.39 (Ghana), US$0.23 (Burkina Faso) and US$0.20 (Malawi-DOSE).  Average hypothetical WTP at baseline for LNS-P&L (one 20g sachet) was approximately US$0.61 (Ghana) and US$0.17 (Malawi-DYAD).  Average experimental WTP for LNS-P&L (20g sachet) was, respectively, approximately US$0.25 (Ghana) and US$0.12 (Burkina Faso).  Several household characteristics that could be used for programmatic targeting, e.g., number of children under five years of age, were associated with WTP. Conclusions: Hypothetical WTP is positive for the vast majority of respondents in all study areas and average WTP is above estimated average national production costs for all LNS products; hence, LNS products may be commercially viable.  However, large proportions of respondents reported WTP below average production costs (e.g., approximately 6% of respondents reported zero WTP in the Ghana baseline) signalling the need to consider publically assisted mechanisms for reaching resource-poor households.