Experiments in malaria prevention
Does raising the price of long lasting anti-malarial insecticide-treated nets (ITNs) from $0 to a $0.75 kill the demand? At least in theory, cost sharing can help reduce wastefulness and save money without serious adverse effects of healthcare of most people.
Based on a field experiment in Kenya, a new paper explores the effects that cost sharing of the price of ITNs charged to pregnant women had on infant mortality.
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Thanks for the heads up Chris. My colleague Abigail attended the author's talk at Brookings the other day and wrote about the paper - including some of its shortcomings - over on NextBillion.net. Interestingly, there have been a series of comments about the efficacy of subsidized vs. free distribution on the post as well. http://www.nextbillion.net/blogs/2008/01/11/to-give-or-not-to-give-academics-study-bednet-distribution
Posted by: Rob | Jan 15, 2008 10:13:04 AM
I think chris is remiss not to mention in his post that the qactual results, which Dani Rodrik calls "striking and unambiguous," indicate that giving away malaria nets is more cost-effective than a cost-sharing program.
The authors find that the reduction in the number of nets demanded because of the price increase is not offset by reductions in waste. Moreover, it finds theft, corruption and black market transactions are more widespread when malaria nets are not free.
This study proves that the "theory" isn't borne out by the facts, and should lead to a major shift in malaria-fighting policy. Instead, it's presented without acknowledgment of the substance or conclusion, and preceded by a defensive explanation of the very theory the paper disproves!
Maybe Chris didn't want to give away the game before folks read the paper for themselves, but the fact is that a lot of people would just read the post, not read the paper, and go away thinking about the discredited theory, without knowing it was discredited.
It's no coincidence that the findings of this paper, which directly contradict the ideology of "private sector development" and reducing poverty through profits, don't show up in this post, but an empirically baseless theory that fits the ideology gets prominent treatment.
Come on, guys, you can do better.
Posted by: Ryan | Jan 15, 2008 1:44:24 PM
Ya, I agree with Ryan's comment. I get this blog in an RSS reader so I clicked on it thinking it must have been clipped...I mean who highlights a study w/o mentioning the findings.
In this case, it really casts a pale over your credibility, because the findings are opposed to your general ideology, but facts and facts and when proven wrong, move on. It'd have been worth clipping the abstract, which I'll do below. You should edit the post.
"It is widely believed 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 in the context of a field experiment in Kenya, in which we randomized the price atwhich
pregnant women could buy long lasting anti-malarial insecticide-treated nets (ITNs) at prenatal clinics. We
find no evidence that cost-sharing reduces wastage on those that 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 cost-sharing induces selection of
women who need the net more: those who pay higher prices appear no sicker than the prenatal clients in the control group in terms of measured anemia (an important indicator of malaria). Cost-sharing does, however, considerably dampen demand. We find that uptake drops by 75 percent when the price of ITNs increases from 0 to $0.75, the price at which ITNs are currently sold to pregnant women in Kenya. We combine our estimates in a cost-effectiveness analysis of ITN prices on infant mortality that incorporates both private and social returns to ITN usage. Overall, given the large positive externality associated with widespread usage of insecticide-treated nets, our results suggest that free distribution to pregnant women is both more effective and more cost-effective than cost-sharing."
Posted by: Mike | Jan 15, 2008 8:09:49 PM
It is not possible to conclude that bednets should be distributed for free based on the Cohen/ Dupas experiment in Western Kenya - as some of the commenters here appear to do.
Jessica Cohen was kind enough to present her paper here at the Center for Global Development last week - my colleague Mead Over was the discussant of the paper. His comments clearly outline what conclusions can and cannot be drawn from the paper. They are posted here.
http://blogs.cgdev.org/globalhealth/2008/01/sachs_not_vindicated.php
http://blogs.cgdev.org/globalhealth/2008/01/user_fees_for_health.php
Posted by: April Harding | Jan 18, 2008 2:12:39 PM