Free Distribution or Cost-Sharing? Evidence from a Randomized Malaria Prevention Experiment. (2010)
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| Venue: | QUARTERLY JOURNAL OF ECONOMICS |
| Citations: | 86 - 8 self |
BibTeX
@ARTICLE{Cohen10freedistribution,
author = {Jessica Cohen and Pascaline Dupas},
title = {Free Distribution or Cost-Sharing? Evidence from a Randomized Malaria Prevention Experiment.},
journal = {QUARTERLY JOURNAL OF ECONOMICS},
year = {2010},
pages = {1--45}
}
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Abstract
It is often argued that cost-sharing—charging a subsidized, positive price— for a health product is necessary to avoid wasting resources on those who will not use or do not need the product. We explore this argument through a field experiment in Kenya, in which we randomized the price at which prenatal clinics could sell long-lasting antimalarial insecticide-treated bed nets (ITNs) to pregnant women. We find no evidence that cost-sharing reduces wastage on those who will not use the product: women who received free ITNs are not less likely to use them than those who paid subsidized positive prices. We also find no evidence that costsharing induces selection of women who need the net more: those who pay higher prices appear no sicker than the average prenatal client in the area in terms of measured anemia (an important indicator of malaria). Cost-sharing does, however, considerably dampen demand. We find that uptake drops by sixty percentage points when the price of ITNs increases from zero to $0.60 (i.e., from 100 % to 90% subsidy), a price still $0.15 below the price at which ITNs are currently sold to pregnant women in Kenya. We combine our estimates in a cost-effectiveness analysis of the impact of ITN prices on child mortality that incorporates both private and social returns to ITN usage. Overall, our results suggest that free distribution of ITNs could save many more lives than cost-sharing programs have achieved so far, and, given the large positive externality associated with widespread usage of ITNs, would likely do so at a lesser cost per life saved. ∗ We thank Larry Katz, the editor, and four anonymous referees for comments that significantly improved the paper. We also thank David Autor, Moshe Bushinsky,
Keyphrases
free distribution randomized malaria prevention experiment pregnant woman important indicator large positive externality david autor sixty percentage point anonymous referee induces selection health product free itns dampen demand cost-sharing reduces wastage average prenatal client social return subsidized positive price wasting resource itns increase larry katz moshe bushinsky field experiment prenatal clinic uptake drop cost-effectiveness analysis itn price widespread usage positive price itn usage long-lasting antimalarial insecticide-treated bed net child mortality cost-sharing program
