Household Production of Health

A Microeconomic Perspective on Health Transitions

by Julie DaVanzo, Paul Gertler

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Over the past 20 years, advances in medical technology have not led to desired health improvements in the Third World. Governments may import and distribute medical technologies widely, but the effectiveness of these technologies will depend on how people respond to them. If such programs are to be effective, planners and practitioners must know what governs families' decisions to seek care and engage in health-improving behaviors. In other words, they need to understand and accommodate behavioral and sociocultural influences on health. This Note argues that behavioral research can inform health policy on three dimensions: (1) how behavioral choices affect health status, (2) what determines these choices, and (3) how policymakers can influence these choices. It shows that economic theory — especially the theory of the household production of health — provides a useful framework for analyzing these three dimensions. In particular, the framework provides a theoretical organizing structure for policy analysis and has important implications for data collection, for the empirical specification of models of behavioral choices, and for the statistical analysis.

This report is part of the RAND Corporation note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

This research in the public interest was supported by RAND, using discretionary funds made possible by the generosity of RAND's donors, the fees earned on client-funded research, and independent research and development (IR&D) funds provided by the Department of Defense.

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