Self-Control and Demand for Preventive Health: Evidence from Hypertension in India

64 Pages Posted: 28 Aug 2017

See all articles by Liang Bai

Liang Bai

University of Edinburgh

Benjamin Handel

University of California, Berkeley

Edward Miguel

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Gautam Rao

Harvard University - Department of Economics

Date Written: August 2017

Abstract

Self-control problems constitute a potential explanation for the under-investment in preventive health care observed in low-income countries. A commonly proposed policy tool to solve such problems is offering consumers commitment devices. We conduct a field experiment to evaluate the effectiveness of different types of theoretically-motivated commitment contracts in increasing preventive doctor visits by hypertensive patients in rural India. We document varying levels of takeup of the different commitment contracts, but find no effects on actual doctor visits or individual health outcomes. Thus, a substantial number of individuals pay for commitments, but then fail to follow through on the specified task, losing money without experiencing any health benefit. We develop and structurally estimate a pre-specified model of consumer behavior under present bias with varying levels of naivete. The results are consistent with a large share of individuals being partially naive about their own self-control problems: in other words, they are sophisticated enough to demand some commitment, but overly optimistic about whether a given commitment is sufficiently strong to be effective. The results suggest that commitment devices may in practice be welfare diminishing, at least in some contexts, and serve as a cautionary tale about the role of these contracts in the health care sector.

Suggested Citation

Bai, Liang and Handel, Benjamin and Miguel, Edward and Rao, Gautam, Self-Control and Demand for Preventive Health: Evidence from Hypertension in India (August 2017). NBER Working Paper No. w23727, Available at SSRN: https://ssrn.com/abstract=3027831

Liang Bai (Contact Author)

University of Edinburgh ( email )

Old College
South Bridge
Edinburgh, Scotland EH8 9JY
United Kingdom

Benjamin Handel

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

Edward Miguel

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Gautam Rao

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

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