Can Good Products Drive Out Bad? Evidence from Local Markets for (Fake?) Antimalarial Medicine in Uganda
Counterfeit and sub-standard antimalarial drugs present a growing threat to public health. This paper investigates the mechanisms that determine the prevalence of fake antimalarial drugs in local markets, their effects, and potential interventions to combat the problem. We collect drug samples from a large set of local markets in Uganda using covert shoppers and employ Raman spectroscopy to test for drug quality. We find that 37 percent of the local outlets sell fake antimalarial drugs. Motivated by a simple model, we conduct a market-level experiment to test whether authentic drugs can drive out fake drugs from the local market. We find evidence of such externalities: the intervention reduced prevalence of substandard and counterfeit drugs in incumbent outlets by half. We also provide suggestive evidence that misconceptions about malaria lead consumers to overestimate antimalarial drug quality, and that opportunistic drug shops exploit these misconceptions by selling substandard and counterfeit drugs. Together, our results indicate that high quality products can drive out low quality ones, but the opposite is true when consumers are less able to infer product quality.
|Date of creation:||Sep 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael Kremer & Edward Miguel, 2004.
"The Illusion of Sustainability,"
35, Center for Global Development.
- Kremer, Michael Robert & Miguel, Edward A., 2004. "The Illusion of Sustainability," Center for International and Development Economics Research, Working Paper Series qt94p8w1d7, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
- Michael Kremer & Edward Miguel, 2004. "The Illusion of Sustainability," NBER Working Papers 10324, National Bureau of Economic Research, Inc.
- Edward Miguel & Michael Kremer, 2004. "The illusion of sustainability," Natural Field Experiments 00287, The Field Experiments Website.
- Milgrom, Paul & Roberts, John, 1986.
"Price and Advertising Signals of Product Quality,"
Journal of Political Economy,
University of Chicago Press, vol. 94(4), pages 796-821, August.
- Bate, Roger & Jin, Ginger Zhe & Mathur, Aparna, 2011.
"Does price reveal poor-quality drugs? Evidence from 17 countries,"
Journal of Health Economics,
Elsevier, vol. 30(6), pages 1150-1163.
- Roger Bate & Ginger Zhe Jin & Aparna Mathur, 2011. "Does Price Reveal Poor-Quality Drugs? Evidence from 17 Countries," NBER Working Papers 16854, National Bureau of Economic Research, Inc.
- repec:gdm:wpaper:7011 is not listed on IDEAS
- Hoyt Bleakley, 2010. "Malaria Eradication in the Americas: A Retrospective Analysis of Childhood Exposure," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 1-45, April.
- Alan I. Barreca, 2010.
"The Long-Term Economic Impact of In Utero and Postnatal Exposure to Malaria,"
Journal of Human Resources,
University of Wisconsin Press, vol. 45(4), pages 865-892.
- Alan Barreca, 2009. "The Long-Term Economic Impact of In Utero and Postnatal Exposure to Malaria," Working Papers 0905, Tulane University, Department of Economics.
- Das, Jishnu & Hammer, Jeffrey & Leonard, Kenneth, 2008.
"The quality of medical advice in low-income countries,"
Policy Research Working Paper Series
4501, The World Bank.
- 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.
- Jessica Cohen & Pascaline Dupas & Simone G. Schaner, 2012.
"Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized Controlled Trial,"
NBER Working Papers
17943, National Bureau of Economic Research, Inc.
- Jessica Cohen & Pascaline Dupas & Simone Schaner, 2015. "Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized Controlled Trial," American Economic Review, American Economic Association, vol. 105(2), pages 609-45, February.
- Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 551-575.
- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
- Asher Wolinsky, 1983. "Prices as Signals of Product Quality," Review of Economic Studies, Oxford University Press, vol. 50(4), pages 647-658.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:9114. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.