1. PRELIMINARY RESULTS
Willingness-to-Pay for Nutrient Supplements to Prevent Early Childhood Under-nutrition: Preliminary Results from a RCT
Thokozani Phiri 1, Stephen A.Vosti2, Neill Booth3, Per Ashorn3,4, Ulla Ashorn3, Nozgechi Phiri5, John Phuka5, Kenneth Maleta5,6 1Socioeconomics Studies Manager, International Lipid-Based Nutrient Supplements (iLiNS) Project, College of Medicine; Dept. of Agricultural and Resource Economics, University of California, Davis; 3School of Health Sciences, University of Tampere, Finland; 4Department of Paediatrics, Tampere University Hospital; 5iLiNS Project, College of Medicine, Mangochi Campus; Department of Community Health, College of Medicine, University of Malawi 
BACKGROUND
a. Up to 50% of all Malawian under-five- year-old children are stunted or underweight (Unicef, 2006).
b. Lipid-based nutrient supplement (LNS) is one such fortified supplement to deal with this problem.
c. Willingness-to-pay (WTP) for LNS is currently unknown.
d. Perceived private benefits of these products will help determine demand and consumer surplus.
Perceived benefits plus production/distribution costs will help identify programmatic and market distribution options for different stakeholder groups (e.g. rural poor, women, SMEs).
CONCLUSION & IMPLICATIONS FOR POLICY
Average stated WTP for LNS was USD 0.86, suggesting that many caregivers associated some benefits with the consumption of the LNS supplement; this also suggests that marketing of LNS may be possible for some stakeholder groups.
The mean value for stated WTP for LNS represents approximately 14% of the weekly wage in rural areas; hence some subsidization of the supplement may be required to put it within reach for poor households.
Over 75% of the sample reported that they were willing to pay anything for LNS; these caregivers perceived some benefits from consuming LNS.
The 24% who considered themselves too poor to pay anything for the supplement (majority of zero- bidders) could have their children receive LNS for free.
The maternal characteristic (education) was positively associated with stated WTP for LNS; this could be useful in targeting information and other programs associated with broad-based distribution of LNS.
Seeing the traditional nutritional substitute before was positively associated with stated WTP for LNS. Targeting the retailers of Likuni Phala could increase the purchases of LNS.
RESULTS
Using a paired t-test:
The means of the maximum bids for LNS (USD 0.85) and of the traditional product (LNS) Likuni Phala (USD 0.88) were not statistically significantly different from one another.
Product
Obs
Mean
(USD)
Std. Dev
Min
Max
LNS
431
0.86
0.75
3.33
Traditional Product
0.89
0.77
24% reported zero WTP for LNS
The following, preliminary regression results report our efforts to identify the respondent, household and village-level factors that are associated with stated WTP for LNS.
OBJECTIVES
Present the methods used to collect data on WTP for LNS.
Report estimated caregivers’ WTP for LNS and for a readily available (though nutritionally inferior, traditional) substitute for LNS.
Identify the caregiver-, household-, and village- level factors associated with WTP for LNS.
Tobit regression: n = 320; χ2 = 40; R2 = 0.05
Source of Data: Malawi iLiNS Project, 2011
METHODS
Questionnaire-based Approach for Soliciting WTP Information
Step 1 – Establish a hypothetical local market for LNS for infants and young children.
Step 2 – Solicit bids for a one-week supply of the traditional supplement (locally known as Likuni Phala, a corn-soy flour-based cereal), 3 times during the trial.
Step 3 – Solicit bids for a one-week supply of LNS (locally known as Chiponde chatsopano), 3 times during the trial.
Step 4 – Solicit information regarding attributes of ‘healthy’ children
Soliciting Willingness-to-Pay
Step 1
Two types of randomly assigned respondents
Male heads of households (288)
Primary caregivers (288)
Step 2
If ‘yes’ Respondent is assigned to a random bidding structure A, B or C
A  0.67, 1.33, 2.00 (USD)
B  1.33, 2.00, 0.67 (USD)
C  2.00, 0.67, 1.33 (USD)
Step 3
Amount > $0
DISCUSSION
General Factors
Gender of WTP respondent and his/her participation on food purchases were not associated with reported WTP for LNS.
Prior encounter with the traditional product (TP) was associated with stated WTP for LNS, and this “seeing” of the TP indicates a willingness to pay more.
Number of very young children in the household was not associated with stated WTP for LNS.
Previous experience of child malnutrition in the household was not associated with stated WTP for LNS.
Parental Factors
Mother’s marital status, and being a housewife was not associated with WTP for LNS.
Maternal educational status was associated with WTP for LNS; mothers with more years of formal schooling were willing to pay more for LNS.
Being a housewife and being a of parents were not associated with stated WTP for LNS.
Fathers’ marital status, being a farmer and level of education and were not associated with stated WTP for LNS.
Environmental Factors
Seasonality was not associated with stated WTP for LNS.
References and Useful Links
Bhatia, M.R. et al, (2002) “Willingness to pay for treated mosquito nets in Surat, India: the design and descriptive analysis of a household survey”
Ewing, V.L, (2010)“Seasonal and geographic differences in treatment- seeking and household cost of febrile illness among children in Malawi”
Hoffman, V , (2008) “Psychology, Gender, and the Intrahousehold Allocation of Free and Purchased Mosquito Nets”
Palanca-Tan, R, (2008) “The Valur of Mortality Risk Reduction for Children in Metro Manila, Inferred from Parent's Willingness to Pay for Dengue Vaccines”
Phuka J, et al. (2008) “Complementary feeding with fortified spread reduces the incidence of severe stunting among 6-18 month old rural Malawian infants”. Archives Pediatr Adolesc Med, 162(7):619-26
United Nations Children’s Fund (2006): The state of the world’s children 2007,United Nations Children’s Fund, New York.
Vosti, A. et al, (2011) “Willingness-To-Pay for a New Maternal Nutrient Supplement : Preliminary Results”
International Lipid Based Nutrient Supplement Project
Acknowledgement: This project is funded by a grant to the University of California, Davis by the Bill & Melinda Gates Foundation.
First question – ‘Are you willing to pay anything for the product?’
Final question – ‘What is your maximum WTP?’
For additional information please contact:
Thokozani Phiri
iLiNS Project, College of Medicine
PO Box 431, Mangochi, MALAWI