Should Firms Promote Public Health to their Customers? Evidence of Economic Impact from a Multi-Country Natural Experiment in Ridesharing
Published on Nov 10, 2021
Abstract
Problem definition: Can firms do good and also make money, particularly when the situation desperately demands it? While research has shown that nudges by health organizations can increase desirable behaviors (like vaccinations), there is limited evidence of how public health nudges by firms affect demand for their services, especially if the primary business of the firm is unrelated to the health industry. In this paper, we study, across multiple countries, how providing an in-app widget with vaccination information nudge affected demand for Careem, providing some of the first multi-country evidence that public health initiatives undertaken by firms can be economically beneficial for the firms themselves, even if their primary business is unrelated to healthcare. Methodology & results: Using a natural experiment with a ridesharing platform that implemented an in-app widget during the Covid-19 pandemic, we find evidence, across multiple countries, that nudging customers to do good, i.e., vaccinate, can have a positive impact on firm revenues. Without providing financial incentives, a simple socially useful public health nudge can generate demand for the platform’s services by providing timely information (e.g., closest vaccine centers) and convenience. Analyzing ~4 million customer trips, we found that the nudge led to a 3.54-7.67% increase in ridesharing usage, generating ~$50,200-$117,700 per week in additional revenues. We conducted analysis of a similar intervention in a very different geography and found consistent results, highlighting the generalizability of our findings. Managerial implications: Our study offers evidence that non-financial vaccine-related nudges can increase firm demand. We hope that it may encourage other firms to experiment with health-related interventions. This work will also open additional avenues for researchers to test ideas related to promoting public health information that has both a positive impact on firms’ profits and social welfare.
Keywords: Nudge, Ridesharing Platform, Public Health, Covid-19, Natural Experiment, Multi-Country Study, Vaccination, Corporate Social Responsibility
