← Search

American Economic Review Vol. 105 No. 2 2015

Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized Controlled Trial

Jessica Cohen1; Pascaline Dupas2; Simone Schaner3

1 School of Public Health, Harvard University, 665 Huntington Avenue, Building 1, Room 1209, Boston, MA 02115, and Brookings Institution (e-mail: ) · 2 Department of Economics, Stanford University, 579 Serra Mall, Office 238, Stanford, CA 94305, and NBER (e-mail: ) · 3 Department of Economics, Dartmouth College, 328 Rockefeller Hall, Hanover, NH (e-mail: ).

open access

Abstract

Both under- and over-treatment of communicable diseases are public bads. But efforts to decrease one run the risk of increasing the other. Using rich experimental data on household treatment-seeking behavior in Kenya, we study the implications of this trade-off for subsidizing life-saving antimalarials sold over-the-counter at retail drug outlets. We show that a very high subsidy (such as the one under consideration by the international community) dramatically increases access, but nearly one-half of subsidized pills go to patients without malaria. We study two ways to better target subsidized drugs: reducing the subsidy level, and introducing rapid malaria tests over-the-counter.

DOI
10.1257/aer.20130267
Volume
105
Issue
2
Pages
609-645
Language
en
Sources
openalex crossref bibtex:phds-export.bib

Cite