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Beliefs, Signal Quality, and Information Sources: Experimental Evidence on Air Quality in Pakistan
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https://doi.org/10.26085/C3FG6DAbstract
We study how information sources as a signal of service quality shape consumers’ beliefs about and demand for air quality forecast services. We provide day-ahead SMS forecasts in Lahore, Pakistan, randomiz- ing whether the forecast is attributed to the government or an NGO. Respondents do not have differential demand by the assigned source but believe the government’s forecasts are worse than the NGO’s. The results demonstrate that consumers expect lower accuracy from the gov- ernment, have a limited willingness to pay for accuracy, and prefer the assigned source as they learn about its service quality.
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