In this study, The Abdul Latif Jameel Poverty Action Lab (J-PAL) used an encouragement randomized control trial (RCT) in order to gauge the effectiveness of a scheme to provide free loans for the installation of a water connection to households.
The program was provided a subsidized interest-free loan to install a water connection. Amendis made this loan available to all eligible households; however, for the evaluation, a random subset of those households received a door-to-door awareness campaign and offered assistance with filling out the application. This promotion was the “encouragement” which pushed selected households (treatment) to sign up for the loan more often than those households which did not receive the promotion (control). In this way, the researchers were able to determine the impact of new Amendis water connections on households.
In the end, because take-up of water connections was higher in the “encouraged” (i.e. treatment) group than the non-encouraged (i.e. control) group, these two groups could be compared. And since encouragement was randomly assigned, any difference in outcomes could be attributed to the difference in the take-up rates of water connections.