Health

Structure of these two lectures on human capital

moving away from physical capital accumulation to human capital accumulation:

health and education – today is on health, and next lecture is on education

Our focus on health today will be on infant mortality, immunizations,

and an example on measles immunization

1. Background

2. Child mortality and low demand for immunization

3. Measles immunization & policy

Background
The importance of policy: China & India compared
China

• Suffered famine in the 1970s and a large decline in IMRs

• After such a large decline in IMRs, these started to decrease at a lower pace

• The opposite of what we would expect if IMR had fallen because of high rates of
economic growth

• Deaton argues that the deceleration was due to less resources devoted to public
health

• Policy plays an important role, not growth

India

• Growth performance comparatively less impressive after a set of reforms

that took place in the 1990s

• Yet, the absolute decline in IMRs is larger in India

• But it is still more dangerous to be born in India

• Why?

• If our focus is on immunization and IMRs in India, we must bring

“democracy” and “free choice” to the table
Child mortality and low demand for immunization
Banerjee-Duflo (BD) 2010
Child mortality and low demand for immunizations (BD – Chap 3)

• Low demand for health

• Lessons from behavioural Economics

• Nudging

• RCTs

• RCTs more broadly

Low demand for health

• Based on behavioural economics, and over a dozen randomized control

trials (RCTs) – see Chapter 3 of the Banerjee- Duflo (2011) book, the
authors asked a fundamental question:

• Since scientific discoveries and subsidies have made infant mortality

prevention (e.g., immunizations) exceedingly cheap:

Why are poor households in poor countries not taking advantage of “low
hanging fruits”?
Low demand for health (Cont..)

• Is it because preventive health care is cheap that people do not

appreciate it?

• Evidence suggest it is not true

• Example: Jessica Cohen and Pascaline Dupas (2010) experiment on

mosquito nets in Kenya
Lessons from behavioural economics
• Time inconsistency and procrastination

Our natural tendency is for immediate rewards

Costs are postponed

• Nudging

• Can we induce people to stop postponing) and incur the cost now via
“rewards” or “nudges”?

• E.g., how about offering lentils to mothers turned up for vaccinating their
children?

• It did work in a village in India, but could it work in a different context?

Nudging

• Millions of people in poor countries might need nudging

Eg., free chorine, immunization rewards, de-worming for free,

additional calorie supplements at school..

• Nudging might induce behaviour in some contexts as Nobel

Prize in Economics 2017 Robert Thaler suggests

• But B-D recognise that finding the “right” nudge is context-

specific requiring millions of RCTs
 RCTs

• Why randomize?

Mitigate the risk that “the treatment” is correlated with omitted

variables or subject to reverse causation – “selection bias”

• RCTs in practice: randomly chose villages/regions to get a particular

treatment (e.g., regions where parents are encouraged to have their
children immunized or others where de-worming medicines are offered)
and control regions where there are no interventions.

• And then, compare “treatments” and “controls” and measure effect of

treatment
RCTs more broadly (Cont..)

• Excellent for ( rigorously) delivering answers to exceedingly

important development policy questions

• RCTs have proven to be effective in many settings to

rigorously evaluate the causal effectiveness of a program

• Still, external validity is one main problem

Q: How do behavioural issues preventing prevention and cure in
poor countries compare to those in rich countries?

• Same behaviour regarding weak beliefs, time inconsistency and necessity of hope

• Manifestations differ

• Context also different – better infrastructure, highly educated mothers

• And public provision such as clean water is often taken for granted

• Nonetheless, lack of knowledge is partially responsible for irresponsible

behaviour, and impatience are just as prevalent in rich countries
 Takeaways
• Low hanging fruits are a puzzle

• RCTs based on behavioral economics can shed light on some behavioral issues

• Weak beliefs?

• Time inconsistency?

• Necessity of hope?

• Behavioral issues, not the price of preventive methods are responsible for high IMRs in
poor countries.

• Nudges can help in both rich and poor countries (e.g., monetary rewards were offered for
vaccinations against COVID in the US; lentils for children’s immunizations have been
offered in India)
Once the root of the problem has been detected, what is the best
policy response?

This type of questions have been addressed from hundreds of studies

(generally RCTs)

Which brings us to the next (reading) item on this topic à

Measles immunization & policy - Banenrjee et al (2021)
Banerjee et al (2021)
• Main objective: how to best increase immunization to improve take up, and finding the most cost
effective policy

• Three interventions combined

1. Reminders (SMSs)

2. Incentives (monetary)

3. Ambassadors/reliable gossipers
Banerjee et al (2021) ..Cont
• Run two regressions

• Entire sample

• Ambassadors sample dummy left out

Banerjee et al (2021)… cont…

Results:

• The combination of the three interventions increases take up

by 44%

• The presence of Ambassadors/ reliable info network effects

makes the policy combination most cost - effective
 Takeaways from the Banerjee et al (2021)

1. Standard tools might such as SMSs reminders might not be effective and others such as (high-slopped) incentives
might not be cost effective

2. Using tools such as SMSs and incentives combined can be effective & cost effective via leveraging networks to diffuse
information

3. Genuine investigation of all possible combinations might lead to the conclusion that nothing works which suggests that
the use of machine learning can help.