HEALTH, HEALTH CARE, AND ECONOMIC DEVELOPMENT †
Wealth, Health, and Health Services in Rural Rajasthan
By ABHIJIT BANERJEE, ANGUS DEATON,
What are the determinants of health and of
well-being? Income and wealth are clearly part
of the story, but does access to health care have
a large independent effect, as the advocates of
more investment in health care, such as the
World Health Organization’s Commission on
Macroeconomics and Health (Commission on
Macroeconomics and Health, 2001), have ar-
gued? This paper reports on a recent survey in a
poor rural area of the state of Rajasthan in India
intended to shed some light on this issue, where
there was an attempt to use a set of interlocking
surveys to collect data on health and economic
status, as well as the public and private provi-
sion of health care.
I. The Udaipur Rural Health Survey
We collected data between January 2002 and
August 2003 in 100 hamlets in Udaipur district,
Rajasthan, India. Udaipur is one of the poorest
† (i) a village survey, where we obtained a village
Discussants: Lant Pritchett, Harvard University; Norbert
Schady, World Bank.
* Banerjee and Duflo: Department of Economics, Mas-
sachusetts Institute of Technology, Cambridge, MA 02139;
Deaton: Department of Economics and Woodrow Wilson
School, Princeton University, Princeton, NJ 08544 (e-mail:
deaton@princeton.edu). We thank Seva Mandir for invalu-
able help in accessing their villages and Vidhya Bhawan for
hosting the research team. Special thanks go to Neelima
Khetan of Seva Mandir, Hardy K. Dewan of Vidhya
Bhawan, and Drs. Renu and Baxi from the health units of
Seva Mandir. We thank Annie Duflo, Neeraj Negi, and
Callie Scott for their superb work in supervising the survey,
and the entire health project team for their tireless effort.
Callie Scott also supervised data entry and cleaning, and she
performed much of the data analysis underlying this paper.
We are grateful to Lant Pritchett and Norbert Schady for
excellent comments. The authors gratefully acknowledge
financial support from the Center for Health and Wellbeing,
Princeton University, the John D. and Catherine T.
MacArthur Foundation, the National Institute of Aging
through the National Bureau of Economic Research, the
Alfred P. Sloan Foundation, and the World Bank.
326
AND ESTHER DUFLO*
districts of India, with a large tribal population
and an unusually high level of female illiteracy
(at the time of the 1991 census, only 5 percent
of women were literate in rural Udaipur). The
survey was conducted in collaboration with two
local institutions: Seva Mandir, an NGO that
works, among other things, on health in rural
Udaipur, and Vidhya Bhawan, a consortium of
schools, teaching colleges, and agricultural col-
leges, who supervised the administration of the
survey. The sample frame consisted of all the
hamlets in the 362 villages where Seva Mandir
operates in at least one hamlet.1 The sample was
stratified according to access to a road (out of
the 100 hamlets, 50 hamlets are at least 500
meters away from a road). Hamlets within each
stratum were selected randomly, with a proba-
bility of being selected proportional to the ham-
let population. We then selected 10 households
in each of 100 hamlets using simple random
sampling, and all individuals were surveyed
within each household.
The data collected include four components:
census, a description of the village’s physical
infrastructure, and a list of health facilities com-
monly used by villagers (100 villages); (ii) a
facility survey, where we collected detailed in-
formation on activities, types and cost of treat-
ment, referrals, availability of medication and
quality of physical infrastructure in all public
facilities (143 facilities) serving the sample vil-
lages, all “modern” private facilities mentioned
in the village surveys or in the household inter-
views (we have surveyed 85 facilities so far, but
this survey is ongoing), and a sample of the
1
A hamlet is a set of houses that are close together, share
a community center, and constitute a separate entity. A
village is an administrative boundary. A village comprises
1–15 hamlets (the mean number of hamlets in a village is
5.6). Seva Mandir in general operates in the poorest hamlets
within a given village.
VOL. 94 NO. 2 HEALTH, HEALTH CARE, AND ECONOMIC DEVELOPMENT
traditional healers mentioned in the village sur-
veys (225 facilities were surveyed); (iii) a
weekly visit to all public facilities serving the
villages (143 facilities in total, with 49 visits per
facility on average) where we checked whether
the facility was open, and if so, who was
present; and (iv) a household and individual
survey, covering 5,759 individuals in 1,024
households. The data cover information on eco-
nomic well-being, integration in society, educa-
tion, fertility history, perception of health and
subjective well-being, and experience with the
health system (public and private), as well as a
small array of direct measures of health (hemo-
globin, blood pressure, weight and height, peak
flow meter measurement).
II. Health and Wealth in Rural Udaipur
The households in the Udaipur survey are
poor, even by the standards of rural Rajasthan.
Their average per capita household expenditure
is 470 rupees, and more than 40 percent of the
people live in households below the official
poverty line, compared with only 13 percent in
rural Rajasthan in the latest official counts for
1999 –2000. Only 46 percent of adult males
(age 14 and older) and 11 percent of adult
females report themselves as literate. Of the 27
percent of adults with any education, three-
quarters completed standard eight or less. The
survey households have little in the way of
household durable goods, and only 21 percent
have electricity.
In terms of measures of health, 80 percent of
adult women and 27 percent of the adult men
have hemoglobin levels below 12 grams per
deciliter; 5 percent of adult women and 1 per-
cent of adult men have hemoglobin levels below
8 grams per deciliter. Using a standard cutoff
for anemia (11 g/dl for women, and 13 g/dl for
men), men are almost as likely (51 percent) to
be anemic as women (56 percent) and older
women are not less anemic than younger ones,
suggesting that diet is a key factor. The average
body mass index (BMI) is 17.8 among adult
men, and 18.1 among adult women; 93 percent
of adult men and 88 percent of adult women
have a BMI less than 21, considered to be the
cutoff for low nutrition in the United States
(Robert Fogel, 1997). Symptoms of disease are
327
widespread, and adults self-report a wide range
of symptoms: one-third reported cold symptoms
in the last 30 days, and 12 percent say the
condition was serious; 33 percent reported fever
(14 percent, serious), 42 percent reported “body
ache” (20 percent, serious), 23 percent reported
fatigue (7 percent, serious), 14 percent problems
with vision (3 percent, serious), 42 percent
headaches (15 percent, serious), 33 percent back
aches (10 percent, serious), 23 percent upper
abdominal pain (9 percent, serious), and 11
percent chest pains (4 percent, serious); 11 per-
cent had experienced weight loss (2 percent,
serious). Few people reported difficulties with
personal care, such as bathing, dressing, or eat-
ing, but many reported difficulty with the phys-
ical activities that are required to earn a living in
agriculture. Thirty percent or more would have
difficulty walking five kilometers, drawing wa-
ter from a well, or working unaided in the fields;
18 –20 percent have difficulty squatting or
standing up from a sitting position.
Yet when asked to report their own health
status, shown a ladder with 10 rungs, 62 percent
place themselves on rungs 5– 8 (more is better),
and less than 7 percent place themselves on one
of the bottom two rungs. Unsurprisingly, older
people report worse health. Also, women at all
ages consistently report worse health than men,
which appears to be a worldwide phenomenon.
Nor do our life-satisfaction measures show any
great dissatisfaction with life: on a five-point
scale, 46 percent take the middle value, and
only 9 percent say their life makes them gener-
ally unhappy. Such results are similar to those
for rich countries; for example, in the United
States, more than a half of respondents report
themselves as a three (quite happy) on a four-
point scale, and 8.5 percent report themselves as
unhappy or very unhappy. These people are
presumably adapted to the sickness that they
experience, in that they do not see themselves as
particularly unhealthy or, perhaps in conse-
quence, unhappy. Yet they are not adapted in
the same way to their financial status, which
was also self-reported on a ten-rung ladder.
Here the modal response was the bottom rung,
and more than 70 percent of people live in
households that are self-reported as living on
the bottom three rungs.
What about the relation between health and
wealth? The standard measure of economic
328 AEA PAPERS AND PROCEEDINGS MAY 2004

TABLE 1—SELECTED HEALTH INDICATORS, BY POSITION

IN THE PER CAPITA MONTHLY EXPENDITURE DISTRIBUTION

Group
Bottom Middle Top
Indicator third third third
Reported health status 5.87 5.98 6.03
No. symptoms self-reported 3.89 3.73 3.96
in last 30 days
BMI 17.85 17.83 18.31
Hemoglobin below 12 g/dl 0.57 0.59 0.51
Peak flow meter reading 314.76 317.67 316.39
High blood pressure 0.17 0.15 0.20
Low blood pressure 0.06 0.08 0.09
FIGURE 1. LOWESS PLOTS OF SELF-REPORTED HEALTH
Notes: Means reported are based on data collected by the
STATUS, BY SEX, AGE, AND PCE
authors from 1,024 households. See text for survey and
variable description.
TABLE 2—HEALTH, HAPPINESS, AND ECONOMIC STATUS

status in India is household total per capita Hemoglobin

Independent Self-reported level below Self-reported
expenditure (PCE), which we collected using an variable health status 12 g/dl happiness
abbreviated consumption questionnaire previ-
A. Regressions Using Subjective Economic Status (SES):
ously used by the National Sample Survey in
SES 0.12 0.01 0.14
the 1999 –2000 survey. In Table 1, we show (4.1) (0.8) (11.6)
self-reported health, number of symptoms SES ⫻ worker 0.14 ⫺0.03 0.01
reported in the last 30 days, BMI, the fraction of (4.7) (4.3) (0.9)

individuals with a hemoglobin count below 12,
peak flow meter, and the fractions of individuals
with high blood pressure and low blood pres-
sure, broken down by third of the per capita
income distribution. Although the pattern is not
always consistent across the groups, individuals
in the lower third of the per capita income
distribution have, on average, a lower level of
self-reported health, lower BMI, and lower lung
capacity, and they are more likely to have a
hemoglobin count below 12 than those in the
upper third. Individuals in the upper third report
the most symptoms over the last 30 days, per-
haps because they are more aware of their own
health status; there is a long tradition in the
Indian and developing country literature of
better-off people reporting more sickness (see
e.g., Christopher Murray and Lincoln C. Chen,
1992; Amartya K. Sen, 2002).
Figure 1 shows self-reported health as a func-
tion of age and gender, comparing the bottom
three deciles with the top three deciles. Self-
reported health is better in the higher deciles,
though the effect is much stronger for men than
for women, for whom there is little or no PCE
gradient. The steeper gradient for men may be
an indication that some of this relationship is
B. Regressions Using Total Household Expenditure (THE):
ln(THE) 0.27 ⫺0.06 0.23
(3.6) (3.2) (7.4)
ln(THE) ⫻ worker 0.05 ⫺0.01 ⫺0.003
(4.0) (4.5) (0.5)
Notes: Regressions also include age and age-squared. Ab-
solute t statistics are reported in parentheses below the
coefficients.
driven by the effect of health on income, since
we would observe such a relation if men earn
more because they are stronger.
We investigate this further in Table 2, in
which the self-reported health status is re-
gressed on age, age-squared, and measures of
economic status. Our regressions show that,
conditional on total household expenditure, nei-
ther health nor happiness was reduced by house-
hold size, so we report regressions using total
household expenditure rather than per capita
household expenditure. We also show the re-
sults of using the household’s own report of its
financial status on a 10-point scale; this measure
is typically a better predictor of health and hap-
piness than are expenditure measures. We also
constructed a dummy for each adult indicating
VOL. 94 NO. 2 HEALTH, HEALTH CARE, AND ECONOMIC DEVELOPMENT
whether that person had earnings from work and
then regressed self-reported health status on
each measure of economic status and its inter-
action with the worker dummy. As anticipated,
the slope of the regression of health on eco-
nomic status is higher for earners, by about
one-fifth for total household expenditure, and
by a factor of 2 for the self-reported economic
status measure. Column 2 shows the same re-
gression with an indicator for having a hemo-
globin level below 12 g/dl as the dependent
variable. In both cases, we also find the inter-
action between the income-earner dummy and
household welfare status to be negative. These
findings are consistent with the idea that at least
some of the gradient comes from the effects of
health on earnings, although they could also
indicate that the nutrition and health inputs re-
ceived by workers are more income-elastic than
those of nonworkers. The last column of the
table shows parallel regressions with happiness
rather than health as the dependent variable. A
concern with these subjective variables is that
there is a personality-based (and reality-free)
component that is common to both the happi-
ness and the health measure, and which could
be different for workers and nonworkers. But
these regressions, unlike those for self-reported
health status or anemia, show no effects of the
interaction term; there appears to be some sug-
gestive evidence of a feedback from health to
earnings, but not from happiness to earnings.
III. Health Care and Health in Rural Udaipur
The combination of the public facility survey,
a private facility survey, and the household sur-
vey casts light on the state of public and private
health care provision in Udaipur district and its
place in people’s lives. The picture is bleak.
Starting with the public health facility surveys,
the weekly absenteeism survey reveals that, on
average, 45 percent of medical personnel are
absent in subcenters and aid posts, and 36 per-
cent are absent in the (larger) primary health
centers and community health centers.2 These
high rates of absences are not due to staff at-
2
A subcenter serves 3,600 individuals and is usually
staffed by one nurse. A primary health center serves 48,000
individuals and has on average 5.8 medical personnel ap-
pointed, including 1.5 doctors.
329
tending patients; whenever the nurse was absent
from a subcenter, we made sure to look for her
in the community. Since subcenters are often
staffed by only one nurse, this high absenteeism
means that these facilities are often closed: we
found the subcenters closed 56 percent of the
time during regular opening hours. Only in 12
percent of the cases was the nurse to be found
in one of the villages served by her subcenter.
The situation does not seem to be specific
to Udaipur: these results are similar to the
absenteeism rate found in nationally repre-
sentative surveys in India and Bangladesh
(Nazmul Chaudhury and Jeffrey Hammer,
2003; Chaudhury et al., 2003).
The weekly survey allows us to assess
whether there is any pattern in center opening.
For each center, we ran a regression of the
fraction of personnel missing on dummies for
each day of the week, time of the day, and
seasonal dummies. We find that the day-of-the-
week dummies are significant at the 5-percent
level in only 7 percent of the regressions, and
the time-of-the-day dummies are significant
only in 10 percent of the regressions. The public
facilities are thus open infrequently and unpre-
dictably, leaving people to guess whether it is
worth their while walking for over half an hour
to cover the 1.4 miles that separate the average
village in our sample from the closest public
health facility.
Faced with this situation, do households
forgo the consumption of health care? Far from
it: Households spend a considerable fraction of
their monthly budget on health care. In the
expenditure survey, households report spending
7.3 percent of their budget on health care.
Households in the top third of the per capita
income distribution spend 11 percent of the
budget on health care. Visits to public facilities
are generally not free (the households spend on
average 110 rupees when they visit a health
facility) even though medicines and services are
supposed to be free, when they are “available.”
Even those who are officially designated as
“below the poverty line,” who are entitled to
completely free care, end up paying only 40
percent less in public facilities than others. Vis-
its to traditional healers (“bhopas”) account for
19 percent of the visits and 12 percent of the
health expenditure of the average household.
Poorer households are more likely to visit the
330 AEA PAPERS AND PROCEEDINGS
bhopas than richer households (27 percent of
the visits and 19 percent of the average monthly
health expenditure), especially in villages where
the public health facilities are closed most often:
in the villages served by the third of facilities
that are closed the most often, 29 percent of the
health visits of the poor are to bhopas (as
against 18 percent in villages served by facili-
ties that are the most open). Irrespective of
whether the public facility serving the village is
mostly closed or not, visits to other private
providers account for 57 percent of the visits
and 65 percent of the costs.
Health personnel in the private sector are
often untrained and largely unregulated, even if
we leave out the bhopas. According to their own
report, 41 percent of those who called them-
selves “doctors” do not have a medical degree,
18 percent have no medical training whatso-
ever, and 17 percent have not graduated from
high school.3 Given the symptoms reported by
the villagers, the treatment received in these
facilities appears rather heterodox: in 68 percent
of the visits to a private facility the patient is
given an injection; in 12 percent of the visits he
is given a drip. A test is performed in only 3
percent of the visits. In public facilities, they are
somewhat less likely to get an injection or a drip
(32 percent and 6 percent, respectively) but no
more likely to be tested.
These data paint a fairly bleak picture: vil-
lagers’ health is poor; the quality of the public
service is abysmal; and private providers who
are unregulated and, for the most part, unqual-
ified provide the bulk of health care in the area.
Having low-quality public facilities is corre-
lated with some direct health measures. Lung
capacity and BMI are lower where the facilities
are worse, after controlling for household per
capita monthly expenditure, distance from the
road, age, and gender. Yet, as we have seen for
the self-reported health status, villagers not only
3
Based on an incomplete sample of 72 doctors. This is
similar to a survey of private providers in Delhi (Jishnu Das,
2001), which found that 41 percent of the providers were
unqualified.
MAY 2004
do not perceive their health as particularly bad,
but they seem fairly content with what they are
getting: 81 percent report that their last visit to
a private facility made them feel better, and 75
percent report that their last visit to a public
facility made them feel better. Self-reported
health and well-being measures, as well as the
number of symptoms reported in the last month,
appear to be uncorrelated with the quality of the
public facilities. The quality of the health ser-
vices may impact health but does not seem to
impact people’s perception of their own health
or of the health-care system.
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