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Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized Controlled Trial

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  • Jessica Cohen
  • Pascaline Dupas
  • Simone G. Schaner

Abstract

Both under- and over-treatment of communicable diseases are public bads. But efforts to decrease one run the risk of increasing the other. Using rich experimental data on household treatment-seeking behavior in Kenya, we study the implications of this tradeoff for subsidizing life-saving antimalarials sold over-the-counter at retail drug outlets. We show that a very high subsidy (such as the one under consideration by the international community) dramatically increases access, but nearly half of subsidized pills go to patients without malaria. We study two ways to better target subsidized drugs: reducing the subsidy level and introducing rapid malaria tests over-the-counter.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17943.

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Date of creation: Mar 2012
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Handle: RePEc:nbr:nberwo:17943

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References

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  1. Alessandro Tarozzi & Aprajit Mahajan & Brian Blackburn & Daniel Kopf & Lakshmi Krishnan & Joanne Yoong, 2011. "Micro-Loans, Insecticide-Treated Bednets and Malaria: Evidence from a Randomized Controlled Trial in Orissa (India)," Working Papers 11-13, Duke University, Department of Economics.
  2. Michael Kremer & Jessica Leino & Edward Miguel & Alix Peterson Zwane, 2011. "Spring Cleaning: Rural Water Impacts, Valuation, and Property Rights Institutions," The Quarterly Journal of Economics, Oxford University Press, vol. 126(1), pages 145-205.
  3. Jessica Cohen & Pascaline Dupas, 2010. "Free Distribution or Cost-Sharing? Evidence from a Randomized Malaria Prevention Experiment," The Quarterly Journal of Economics, MIT Press, vol. 125(1), pages 1-45, February.
  4. Nava Ashraf & James Berry & Jesse M. Shapiro, 2010. "Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia," American Economic Review, American Economic Association, vol. 100(5), pages 2383-2413, December.
  5. Gertler, Paul J. & Hammer, Jeffrey S., 1997. "Strategies for pricing publicly provided health services," Policy Research Working Paper Series 1762, The World Bank.
  6. Adhvaryu, Achyuta, 2011. "Learning, Misallocation, and Technology Adoption: Evidence from New Malaria Therapy in Tanzania," Working Papers 92, Yale University, Department of Economics.
  7. Jishnu Das & Jeffrey Hammer & Kenneth Leonard, 2008. "The Quality of Medical Advice in Low-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 93-114, Spring.
  8. Björkman Nyqvist, Martina & Svensson, Jakob & Yanagizawa-Drott, David, 2012. "Can Good Products Drive Out Bad? Evidence from Local Markets for (Fake?) Antimalarial Medicine in Uganda," CEPR Discussion Papers 9114, C.E.P.R. Discussion Papers.
  9. Leonard, Kenneth L., 2009. "The cost of imperfect agency in health care: Evidence from rural Cameroun," Journal of Development Economics, Elsevier, vol. 88(2), pages 282-291, March.
  10. Olmstead, Todd & Zeckhauser, Richard, 1999. "The menu-setting problem and subsidized prices: drug formulary illustration," Journal of Health Economics, Elsevier, vol. 18(5), pages 523-550, October.
  11. Pascaline Dupas, 2011. "Health Behavior in Developing Countries," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 425-449, 09.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Appropriate Aid Subsidy Levels
    by Economic Logician in Economic Logic, Too on 2014-01-15 15:50:00
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Cited by:
  1. Dillon, Andrew & Friedman, Jed & Serneels, Pieter, 2014. "Health Information, Treatment, and Worker Productivity: Experimental Evidence from Malaria Testing and Treatment among Nigerian Sugarcane Cutters," IZA Discussion Papers 8074, Institute for the Study of Labor (IZA).
  2. Larrú, José María, 2012. "Evaluar para aprender. Eficiencia en salud y desarrollo
    [Evaluating for learning. Efficiency in health and development]
    ," MPRA Paper 38788, University Library of Munich, Germany.
  3. Alessandro Tarozzi & Aprajit Mahajan & Brian Blackburn & Dan Kopf & Lakshmi Krishnan & Joanne Yoong, 2014. "Micro-loans, Insecticide-Treated Bednets, and Malaria: Evidence from a Randomized Controlled Trial in Orissa, India," American Economic Review, American Economic Association, vol. 104(7), pages 1909-41, July.
  4. Lori Beaman & Dean Karlan & Bram Thuysbaert & Christopher Udry, 2014. "Self-Selection into Credit Markets: Evidence from Agriculture in Mali," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 14/884, Ghent University, Faculty of Economics and Business Administration.

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