What Is the Price of Prevention?
New Evidence from a Field Experiment
Published in: Journal of Health Economics, v. 32, no. 1, Jan. 2013, p. 207-218
Posted on RAND.org on January 01, 2013
- Does the cost of treatment influence the demand for preventive testing?
- What is the price elasticity of demand for cancer screening?
- Do prices help to “target” higher risk individuals?
How does increasing access to treatment affect the demand for preventive testing? In this paper we present results from a field experiment in Nigeria in which we offered cervical cancer screening to women at randomly chosen prices. To test our hypothesis, we also offered women a lottery where the payoff was a subsidy towards the cost of cervical cancer treatment (conditional upon a diagnosis of cervical cancer). We find that women randomly selected to receive the conditional cancer treatment subsidy were about 4 percentage points more likely to take up screening than those in the control group. We also show that reducing the price of screening by 10 cents increased take-up by about 1 percentage point. These results offer compelling evidence that the optimal set of subsidies to increase take-up of preventive testing in developing countries, must include subsidies towards treatment costs (in addition to price subsidies).
- Subsidizing treatment costs increases the demand for preventive testing.
- Prices matter but only partially.
- We find some evidence that higher prices may help to target services to higher risk individuals.
- Policies to increase preventive testing in developing countries should include subsidies towards treatment costs.