IDEAS home Printed from https://ideas.repec.org/p/hhs/sduhec/2013_008.html
   My bibliography  Save this paper

Incentivising appropriate malaria treatment-seeking behaviour with price subsidies

Author

Listed:

Abstract

One of the most serious problems in the fight against malaria, especially in Africa, is the fact that many individuals suffering from malaria do not have easy access to effective antimalarials while at the same time a large proportion of people receiving antimalarials do not suffer from malaria. In order to improve access, a global price subsidy of 95% has been proposed for the most effective antimalarial, artemisininbased combination therapy (ACT). The objective of this proposal is to lower the consumer price on effective malaria medicine to increase access for, in particular, poor consumers. However, treatment of patients not suffering from malaria with antimalarials including ACTs has been proven widespread and a subsidy is likely to increase this overtreatment. This means waste of resources and will result in inflating the subsidy funds required. In addition, as has happened with older types of malaria medicine, treating nonmalarial fevers with malaria medicine may increase the risk of artemisinin resistance development. Diagnostic tests for malaria may have the potential for reducing overtreatment, but tests are expensive for the typical malaria treatmentseeking individual. In order to both increase access and reduce overtreatment we propose a subsidy on rapid diagnostic tests (RDTs) together with the ACT subsidy. The main objective of the paper is to investigate the optimal combination of subsidies that incentivises individuals suspecting themselves to have malaria to always test before buying an effective drug. We present a model that describes the health seeking behaviour of a representative individual using an expected utility framework. Based on numerical simulations of our model we find that a price reduction on RDTs is necessary to incentivise testing while at the same time, the subsidy on ACT can be lower than the proposed 95% without compromising access. The leastcost policy of the health policy maker is to subsidise both ACT and RDT, redirecting some of the subsidy money from ACT to RDT.

Suggested Citation

  • Schultz Hansen, Kristian & Hjernø Lesner, Tine & Østerdal, Lars Peter, 2013. "Incentivising appropriate malaria treatment-seeking behaviour with price subsidies," DaCHE discussion papers 2013:8, University of Southern Denmark, Dache - Danish Centre for Health Economics.
  • Handle: RePEc:hhs:sduhec:2013_008
    as

    Download full text from publisher

    File URL: https://www.sdu.dk/-/media/files/om_sdu/centre/cohere/working+papers/2013/2013_8.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Medlin, Carol & de Walque, Damien, 2008. "Potential applications of conditional cash transfers for prevention of sexually transmitted infections and HIV in Sub-Saharan Africa," Policy Research Working Paper Series 4673, The World Bank.
    2. Jessica Cohen & Pascaline Dupas, 2010. "Free Distribution or Cost-Sharing? Evidence from a Randomized Malaria Prevention Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 125(1), pages 1-45.
    3. Catherine Goodman & S. Patrick Kachur & Salim Abdulla & Peter Bloland & Anne Mills, 2009. "Concentration and drug prices in the retail market for malaria treatment in rural Tanzania," Health Economics, John Wiley & Sons, Ltd., vol. 18(6), pages 727-742, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nicola Lacetera & Mario Macis & Robert Slonim, 2011. "Rewarding Altruism? A Natural Field Experiment," NBER Working Papers 17636, National Bureau of Economic Research, Inc.
    2. B Kelsey Jack, "undated". "Market Inefficiencies and the Adoption of Agricultural Technologies in Developing Countries," CID Working Papers 50, Center for International Development at Harvard University.
    3. Margaret Triyana, 2016. "Do Health Care Providers Respond to Demand-Side Incentives? Evidence from Indonesia," American Economic Journal: Economic Policy, American Economic Association, vol. 8(4), pages 255-288, November.
    4. Hoffmann, Bridget, 2018. "Do non-monetary prices target the poor? Evidence from a field experiment in India," Journal of Development Economics, Elsevier, vol. 133(C), pages 15-32.
    5. Victor Iajya & Nicola Lacetera & Mario Macis & Robert Slonim, 2012. "The Effects of Information, Social and Economic Incentives on Voluntary Undirected Blood Donations: Evidence from a Randomized Controlled Trial in Argentina," NBER Working Papers 18630, National Bureau of Economic Research, Inc.
    6. Fitzsimons, Emla & Malde, Bansi & Mesnard, Alice & Vera-Hernández, Marcos, 2016. "Nutrition, information and household behavior: Experimental evidence from Malawi," Journal of Development Economics, Elsevier, vol. 122(C), pages 113-126.
    7. Okeke, Edward N. & Adepiti, Clement A. & Ajenifuja, Kayode O., 2013. "What is the price of prevention? New evidence from a field experiment," Journal of Health Economics, Elsevier, vol. 32(1), pages 207-218.
    8. Michael Grimm & Jörg Peters, 2012. "Improved Cooking Stoves that End up in Smoke?," RWI Positionen, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 09, 09.
    9. Fischer, Greg & Karlan, Dean & McConnell, Margaret & Raffler, Pia, 2019. "Short-term subsidies and seller type: A health products experiment in Uganda," Journal of Development Economics, Elsevier, vol. 137(C), pages 110-124.
    10. Augsburg, Britta & Rodríguez-Lesmes, Paul Andrés, 2018. "Sanitation and child health in India," World Development, Elsevier, vol. 107(C), pages 22-39.
    11. Michael Grimm & Anicet Munyehirwe & Jörg Peters & Maximiliane Sievert, 2015. "A First Step Up the Energy Ladder? Low Cost Solar Kits and Household’s Welfare in Rural Rwanda," Ruhr Economic Papers 0554, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    12. Bénédicte Apouey & Gabriel Picone, 2014. "Social Interactions And Malaria Preventive Behaviors In Sub‐Saharan Africa," Health Economics, John Wiley & Sons, Ltd., vol. 23(9), pages 994-1012, September.
    13. Marshall Burke & Lauren Falcao Bergquist & Edward Miguel, 2018. "Sell Low and Buy High: Arbitrage and Local Price Effects in Kenyan Markets," NBER Working Papers 24476, National Bureau of Economic Research, Inc.
    14. Melissa Schettini Kearney & Phillip B. Levine, 2011. "Income Inequality and Early Non-Marital Childbearing: An Economic Exploration of the "Culture of Despair"," NBER Working Papers 17157, National Bureau of Economic Research, Inc.
    15. Bhattacharya, Debopam & Dupas, Pascaline, 2012. "Inferring welfare maximizing treatment assignment under budget constraints," Journal of Econometrics, Elsevier, vol. 167(1), pages 168-196.
    16. Bernard, Tanguy & Hidrobo, Melissa & Le Port, Agnès & Rawat, Rahul, 2017. "Nutrition incentives in dairy contract farming in northern Senegal," IFPRI discussion papers 1629, International Food Policy Research Institute (IFPRI).
    17. Cooper, Jan E. & Dow, William H. & de Walque, Damien & Keller, Ann C. & McCoy, Sandra I. & Fernald, Lia C.H. & Balampama, Marianna P. & Kalolella, Admirabilis & Packel, Laura J. & Wechsberg, Wendee M., 2017. "Female sex workers use power over their day-to-day lives to meet the condition of a conditional cash transfer intervention to incentivize safe sex," Social Science & Medicine, Elsevier, vol. 181(C), pages 148-157.
    18. Jacopo Bonan & Stefano Pareglio & Massimo Tavoni, 2014. "Access to Modern Energy: a Review of Impact Evaluations," Working Papers 2014.96, Fondazione Eni Enrico Mattei.
    19. Brian P. Greaney & Joseph P. Kaboski & Eva Van Leemput, 2016. "Can Self-Help Groups Really Be "Self-Help"?," Review of Economic Studies, Oxford University Press, vol. 83(4), pages 1614-1644.
    20. Gunther Bensch & Jörg Peters, 2014. "The Intensive Margin of Technology Adoption - Experimental Evidence on Improved Cooking Stoves in Rural Senegal," Ruhr Economic Papers 0494, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

    More about this item

    Keywords

    Health and economic development; public health; medical subsidy programmes; malaria; drug resistance;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:sduhec:2013_008. 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: . General contact details of provider: https://edirc.repec.org/data/hesdudk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Volmar Skovsgaard (email available below). General contact details of provider: https://edirc.repec.org/data/hesdudk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.