NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Liang Bai, Benjamin Handel, Edward Miguel, Gautam Rao

NBER Working Paper No. 23727
Issued in August 2017
NBER Program(s):DEV, HC

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.

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Document Object Identifier (DOI): 10.3386/w23727

 
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