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Learning, Misallocation, and Technology Adoption: Evidence from New Malaria Therapy in Tanzania

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  • Achyuta Adhvaryu

Abstract

I study how the misallocation of new technology to individuals, who have low ex post returns to its use, affects learning and adoption behaviour. I focus on anti-malarial treatment, which is frequently over-prescribed in many low-income country contexts where diagnostic tests are inaccessible. I show that misdiagnosis reduces average therapeutic effectiveness, because only a fraction of adopters actually have malaria, and slows the rate of social learning due to increased noise. I use data on adoption choices, the timing and duration of fever episodes, and individual blood slide confirmations of malarial status from a pilot study for a new malaria therapy in Tanzania to show that individuals whose reference groups experienced fewer misdiagnoses exhibited stronger learning effects and were more likely to adopt.

Suggested Citation

  • Achyuta Adhvaryu, 2014. "Learning, Misallocation, and Technology Adoption: Evidence from New Malaria Therapy in Tanzania," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(4), pages 1331-1365.
  • Handle: RePEc:oup:restud:v:81:y:2014:i:4:p:1331-1365
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    File URL: http://hdl.handle.net/10.1093/restud/rdu020
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    Citations

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    Cited by:

    1. Raphaël Soubeyran, 2019. "Technology adoption and pro-social preferences," CEE-M Working Papers halshs-02291905, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    2. Thuilliez, Josselin & Touré, Nouhoum, 2024. "Opinions and vaccination during an epidemic," Journal of Mathematical Economics, Elsevier, vol. 111(C).
    3. Awudu Abdulai, 2023. "Information acquisition and the adoption of improved crop varieties," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(4), pages 1049-1062, August.
    4. Jean-Claude Berthélemy & Victor Doubliez & Josselin Thuilliez, 2015. "Prevention or treatment? The introduction of a new antimalarial drug in Angola," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01244406, HAL.
    5. Wilson, Nicholas, 2021. "Why is ageing associated with lower adoption of new technologies? Evidence from voluntary medical male circumcision and a structural model," The Journal of the Economics of Ageing, Elsevier, vol. 19(C).
    6. Nicholas W. Papageorge, 2021. "Modeling Behavior during a Pandemic: Using HIV as an Historical Analogy," NBER Working Papers 28898, National Bureau of Economic Research, Inc.
    7. Cohen, Jessica & Saran, Indrani, 2018. "The impact of packaging and messaging on adherence to malaria treatment: Evidence from a randomized controlled trial in Uganda," Journal of Development Economics, Elsevier, vol. 134(C), pages 68-95.
    8. Josselin Thuilliez & Nouhoum Touré, 2024. "Opinions and vaccination during an epidemic," Post-Print hal-04490900, HAL.
    9. Kevin A. Bryan & Heidi L. Williams, 2021. "Innovation: Market Failures and Public Policies," NBER Working Papers 29173, National Bureau of Economic Research, Inc.
    10. Berthélemy, Jean-Claude & Gaudart, Jean & Thuilliez, Josselin, 2015. "Prevention or treatment? The case of malaria," Economics Letters, Elsevier, vol. 131(C), pages 16-19.
    11. Angelucci, Manuela & Bennett, Daniel M, 2022. "Depression, Pharmacotherapy, and the Demand for a Novel Health Product," IZA Discussion Papers 15832, Institute of Labor Economics (IZA).
    12. Alfredo Paloyo & Arndt Reichert, 2017. "Biting Back at Malaria: Assessing Health-service Providers' Compliance with Treatment Guidelines," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 591-626, August.
    13. Milusheva,Sveta, 2020. "Using Mobile Phone Data to Reduce Spread of Disease," Policy Research Working Paper Series 9198, The World Bank.
    14. Norton, Benjamin P. & Hoel, Jessica B. & Michelson, Hope, 2020. "The demand for (fake?) fertilizer: Using an experimental auction to examine the role of beliefs on agricultural input demand in Tanzania," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304444, Agricultural and Applied Economics Association.
    15. Milusheva, Sveta, 2020. "Managing the spread of disease with mobile phone data," Journal of Development Economics, Elsevier, vol. 147(C).
    16. Aggarwal, Shilpa, 2021. "The long road to health: Healthcare utilization impacts of a road pavement policy in rural India," Journal of Development Economics, Elsevier, vol. 151(C).
    17. Raphael Soubeyran, 2021. "Pro-social Motivations, Externalities and Incentives," Working Papers hal-03212888, HAL.
    18. Powell-Jackson, Timothy & Ansah, Evelyn K., 2015. "The indirect effects of subsidised healthcare in rural Ghana," Social Science & Medicine, Elsevier, vol. 144(C), pages 96-103.
    19. Jürgen Maurer & Katherine M. Harris, 2016. "Learning to Trust Flu Shots: Quasi‐Experimental Evidence from the 2009 Swine Flu Pandemic," Health Economics, John Wiley & Sons, Ltd., vol. 25(9), pages 1148-1162, September.
    20. Josselin Thuilliez & Nouhoum Touré, 2024. "Opinions and vaccination during an epidemic," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-04490900, HAL.

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