Pricing and Access: Lessons from Randomized Evaluations in Education and Health

45 Pages Posted: 17 Apr 2009

See all articles by Alaka Holla

Alaka Holla

World Bank; Brown University; Innovations for Poverty Action

Michael Kremer

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER); Center for Global Development; Harvard University - Harvard Kennedy School (HKS)

Date Written: January 5, 2009

Abstract

This paper surveys evidence from recent randomized evaluations in developing countries on the impact of price on access to health and education. The debate on user fees has been contentious, but until recently much of the evidence was anecdotal. Randomized evaluations across a variety of settings suggest prices have a large impact on take-up of education and health products and services. While the sign of this effect is consistent with standard theories of human capital investment, a more detailed examination of the data suggests that it may be important to go beyond these models. There is some evidence for peer effects, which implies that for some goods the aggregate response to price will exceed the individual response. Time-inconsistent preferences could potentially help explain the apparently disproportionate effect of small short-run costs and benefits on decisions with long-run consequences.

Keywords: access to health, access to education, human capital investment

Suggested Citation

Holla, Alaka and Kremer, Michael R., Pricing and Access: Lessons from Randomized Evaluations in Education and Health (January 5, 2009). Center for Global Development Working Paper No. 158. Available at SSRN: https://ssrn.com/abstract=1390281 or http://dx.doi.org/10.2139/ssrn.1390281

Alaka Holla (Contact Author)

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Michael R. Kremer

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