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The Demand for Outpatient Medical Care in Rural Kenya

Author

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  • Randell P. Ellis

    (Institute for Economic Development, Boston University)

  • Germano M. Mwabu

    (University of Nairobi, Kenya)

Abstract

This paper develops a new specification of the demand for outpatient medical care and then estimates the model using data from a household survey conducted in rural Kenya in 1989. A four-stage nested logit model is used with a variable number of choices at several nodes. The first stage modeled is the choice of whether or not to report an illness, while the second is the probability of seeking treatment conditional on a positive report of illness. In contrast with the previous literature, the first two stages are modeled separately rather than as a single decision to seek treatment. The third stage, the individual's choice of a particular provider, is modeled as depending upon individual and household characteristics, as well as characteristics of specific health facilities from which choices are made. The fourth stage modeled is the choice of a mode of transport to the health facility (walking or taking the bus), an endogenous choice variable that greatly affects the total cost of seeking treatment. The previous empirical literature has not attempted to separate out the probability of reporting an illness from the probability of seeking treatment, and hence has estimated only the combined effect of variables such as income on the illness and the decision to seek treatment. This study finds that income and wealth variables are negatively related to reporting an illness, but positively related to deciding to seek treatment. Most of the demographic variables seem to influence the probability of reporting an illness rather than the decision to seek treatment. This finding is significant because if the results from one setting are applied to others, it is important to know whether demand for health care depends upon the underlying illness patterns or the demographics of the population. This study would suggest that the former are more important. The choice of mode of transportation is found to be is clearly endogenous, and affected by travel time, travel costs, and the
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Suggested Citation

  • Randell P. Ellis & Germano M. Mwabu, 2004. "The Demand for Outpatient Medical Care in Rural Kenya," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-140, Boston University - Department of Economics.
    • Handle: RePEc:bos:iedwpr:dp-140
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    References listed on IDEAS

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    Cited by:

    1. Mary Ngendo Mwami & Martine Odhiambo Oleche, 2017. "Determinants of Utilization of Health Care Services in Kenya," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(10), pages 132-156, October.
    2. Gan, Lydia L. & Frederick, James R., 2010. "The Willingness to Spend on Healthcare: Evidence from Singapore," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 6(1-2), pages 1-15, April.
    3. Dow, W.H., 1995. "Discrete Choice Estimation of Price-Elasticities: The Benefits of Flexible Behavioral Model of Health Care Demand," Papers 95-20, RAND - Labor and Population Program.
    4. Annemarie Wouters & Anthony Kouzis, 1996. "Cost recovery and improved drug availability in Niger — implications for total patient treatment costs," Health Economics, John Wiley & Sons, Ltd., vol. 5(1), pages 37-59, January.
    5. John S. Akin & David K. Guilkey & Paul L. Hutchinson & Michael T. McIntosh, 1998. "Price elasticities of demand for curative health care with control for sample selectivity on endogenous illness: an analysis for Sri Lanka," Health Economics, John Wiley & Sons, Ltd., vol. 7(6), pages 509-531, September.
    6. Jimenez, Emmanuel & DEC, 1994. "Human and physical infrastructure : public investment and pricing policies in developing countries," Policy Research Working Paper Series 1281, The World Bank.
    7. Jonathan J.A.O. Odwee & Francis Nathan Okurut & Asaf Adebua, 2006. "The determinants of health care demand in Uganda: The case study of Lira District, Northern Uganda," Working Papers 155, African Economic Research Consortium, Research Department.
    8. Dow, W.H., 1995. "Unconditional Demand for Curative Health Inputs: Does Selection on Health Status Matter in the Long Run?," Papers 740, Yale - Economic Growth Center.
    9. Dominic Hodgkin, 1996. "Household characteristics affecting where mothers deliver in rural Kenya," Health Economics, John Wiley & Sons, Ltd., vol. 5(4), pages 333-340, July.
    10. Charasse-Pouélé, Cécile & Fournier, Martin, 2006. "Health disparities between racial groups in South Africa: A decomposition analysis," Social Science & Medicine, Elsevier, vol. 62(11), pages 2897-2914, June.

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