Condoms are known to provide protection from a variety of sexually transmitted infections (STIs), including HIV, in addition to providing protection against unwanted pregnancies.  Globally, many organizations including the WHO and UNAIDS have made increased condom usage a point of emphasis in the fight against HIV.  Despite this, demand for condoms remains limited in much of the developing world.  Understanding the barriers to condom usage is a research agenda with immediate policy implications.

Prices represent one category of barriers to condom use.  The obvious and first order role of price as a barrier to condom use is expense.  If condoms are too expensive relative to limited budgets in poor countries, it should not be surprising that individuals prefer not to adopt this technology.  Naturally, a large number of interventions focus on distributing low cost or free condoms to circumvent this problem.  However, another potential role of price is as an indicator of quality.  If people are uncertain about the quality of condoms and they observe NGOs and other institutions distributing them at very low cost, they may infer that condoms are of low quality or limited use and demand fewer of them for that reason.  Finally, some recent research has shown that people may be more likely to utilize health investments if they have paid for them directly, rather than if they have received them for free.  This absence of the “sunk cost fallacy” may also undercut the capacity of NGOs and governments to distribute condoms if individuals simply do not value or use free condoms.

Study participants were asked to fill out a survey and were then randomly offered one of three treatments:  (1) Price randomization:  Individuals receive discount coupons to purchase condoms at the local health clinic at different, reduced prices; (2) Sunk costs: Individuals are offered the choice to purchase coupons in advance, at different prices, redeemable for condoms at the local health clinic;  (3) Sunk costs + refund: Individuals are offered  the choice of purchasing coupons in advance, redeemable for condoms at the health clinic, similar to those offered to the second group.  However, this group is immediately offered a refund to enable the distinction between the impacts of willingness to buy coupons and of the psychological effect of having had to actually pay for them.