Neighborhood Peer Effects in the Use of Preventive Health Care

Abstract

Individual participation in preventive care may depend on preventive health behavior in an individual’s peer group. This paper analyzes the importance of social interactions in the context of new social policies (PROGRESA) in Mexico that aim to increase the participation in different types of preventive care. We follow the promising approach of analyzing social interactions in real world peer groups. Identification of social interactions is based on a partial-population design. Results indicate that PROGRESA succeeded in increasing preventive care usage among program eligible households. In addition, endogenous social interactions increase preventive care usage both among eligibles and non-eligibles for various types of prevention. The overall treatment effect of PROGRESA on prevention can be decomposed in a direct effect related to financial incentives and an indirect effect related to social interactions. The indirect effect accounts for 10% up to 58% of the total treatment effect.

Keywords: preventive care; non-participation; social interactions; PROGRESA; partial-population design; treatment effects

JEL Classification: C31, C93, I12, I18, I38, H51