Solutions Flashcards
Solutions
Information (ALL!)
Subsidise
Credit
Example of importance of ALLinformation provided isi necessary (cautionary tale)
Information provision to switch from contaminated wells - actually led to 46% increase in child mortality. WHY? Incomplete info, They just switched wells to more E Coli bacteria.
Main reason for subsidising health products
Many diseases are communicable ⇒ externality of one’s health behavior onto other. E.g social benefit of wearing a mask during COVID.
Dupas bednets experiment findings:
Was demand price inelastic (did they still buy after made chargeable?)
Demand is price elastic - sensitive to price (reduced consumption
Can marketing/info reduce price sensitivity - how did Dupas do this?
Framing (emphasise health benefits or cost savings)
Verbal commitment (foot in door technique - feel more obliged to fulfil)
Gender - offer to female household lead, male head, or both jointly
Findings of marketing/info provision
Not much matters expect for price. Marketing/info doesn’t seem to reduce sensitivity to price unfortunately
Do people use bednets regardless of price paid?
yes - a positive at least, they value even if free!
Lower price higher adoption?
yes
Similar results with other health products: (people use regardless of price, demand sensitive, info/marketing ineffective) (2)
Ashraf - water purification product
Meredith - Soap, vitamins
Are people willing to pay once subsidy goes away
Yes - beats Easterlys white mans burden that aid creates dependencies and people wont buy if made chargeable
Problem with subsidies when social>private returns
Free riding so the same positive results may not apply - e.g with vaccines, people may not get vaccinated if other people are so feel don’t have to
3rd solution: Provide Credit
Pros (2 cases) and cons (2)
Tarozzi - credit for bednets success
Devoto - credit for home water supply success
However
Microfinance studies haven’t looked much at health, so need further looking.
Studies find microfinance itself makes people stressed/anxious about repayment (Andhra - peer pressure in joint liability caused stress/suicide!)
Are information and subsidies on preventative technologies cost effective? What else could we address?
Geography e.g eradicating malaria instead of preventing?
Poor supply of healthcare e.g well equipped hospitals
(The other 2 causes of poor health, since credit info and subsidies only address the poor private health behaviour!)
