To Give or To Sell?

The idea that social enterprises can scale faster and become more sustainable with profit is usually popular in news stories that highlight social entrepreneurship. No doubt, anecdotes that highlight the potential of selling low-cost and high-quality products to alleviate poverty captivate attention, but the reality is not always as rosy as journalistic interpretation when it comes to potential return and social impact.
 

Recent J-PAL finding shows that even low costs can discourage the poor from using life-improving products through a series of randomized control trials in different settings. It concluded that charging small fees doesn't always encourage users to take up the products or use them more effectively as claimed before. 

While we can try to discredit its methodology and results, but I think we will miss the point. The study is not meant to discredit market-based approach where most might take longer time to yield impact, but it's demanding evidence to back up passionate claims of market potential and subject market experiment trials to rigorous examination. Even though J-PAL didn't go deeper to explain key reasons why market experiments didn't work in those settings but I think the most important message is that we need deeper understanding over the fundamental question of whether products should be given free or sold.

Amid fervent enthusiasm in advancing market-based approach, it's even more important to remind ourselves over and over again that profit orientation won't suddenly be the panacea in poverty alleviation effort. No matter how favorable it may appear to social enterprises, we need more evidence to back up claims that the poor can truly benefit from it.