TY - JOUR
T1 - Self-Control and Demand for Preventive Health: Evidence from Hypertension in India
AU - Bai, Liang
AU - Handel, Benjamin
AU - Miguel, Edward
AU - Rao, Gautam
N1 - Funding Information:
We thank Child Relief International, the Center for Equitable Growth, and the Berkeley Population Center for funding. We thank Allyson Barnett, Fenella Carpena, Carson Christiano, Jen Kwok, and Deepak Saraswat for excellent research assistance. We are also grateful to seminar audiences at Berkeley, Harvard, Stanford, CEU, Wharton, UPF, and numerous others for useful suggestions. All errors remain our own.
Publisher Copyright:
© 2020 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.
PY - 2021/12/2
Y1 - 2021/12/2
N2 - Abstract Self-control problems constitute a potential explanation for the underinvestment in preventive health in low-income countries. Behavioral economics offers a tool to solve such problems: 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. Despite achieving high take-up of such contracts in some treatment arms, we find no effects on actual doctor visits or individual health outcomes. A substantial number of individuals pay for commitment but fail to follow through on the doctor visit, losing money without experiencing health benefits. We develop and structurally estimate a prespecified model of consumer behavior under present bias with varying levels of naiveté. The results are consistent with a large share of individuals being partially naive about their own self-control problems: sophisticated enough to demand some commitment but overly optimistic about whether a given level of 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 their role in health care.
AB - Abstract Self-control problems constitute a potential explanation for the underinvestment in preventive health in low-income countries. Behavioral economics offers a tool to solve such problems: 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. Despite achieving high take-up of such contracts in some treatment arms, we find no effects on actual doctor visits or individual health outcomes. A substantial number of individuals pay for commitment but fail to follow through on the doctor visit, losing money without experiencing health benefits. We develop and structurally estimate a prespecified model of consumer behavior under present bias with varying levels of naiveté. The results are consistent with a large share of individuals being partially naive about their own self-control problems: sophisticated enough to demand some commitment but overly optimistic about whether a given level of 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 their role in health care.
UR - http://www.scopus.com/inward/record.url?scp=85113610435&partnerID=8YFLogxK
U2 - 10.1162/rest_a_00938
DO - 10.1162/rest_a_00938
M3 - Article
SN - 0034-6535
VL - 103
SP - 835
EP - 856
JO - REVIEW OF ECONOMICS AND STATISTICS
JF - REVIEW OF ECONOMICS AND STATISTICS
IS - 5
ER -