Department of Economics and Business
Fuglesangs Allé 4
building 2628, room 310
8210 Aarhus V
NBER Working Papers and Publications
|February 2013||Estimating the Impact of Means-tested Subsidies under Treatment Externalities with Application to Anti-Malarial Bednets|
with Debopam Bhattacharya, Pascaline Dupas: w18833
Regular use of effective health-products such as insecticide-treated mosquito nets (ITN) by a household benefits its neighbors by (a) reducing chances of infection and (b) raising awareness about product-effectiveness, thereby increasing product-use. Due to their potential social benefits and high purchase price, causing free-riding and sub-optimal private procurement, such products may be subsidized in developing countries through means-testing. Owing to associated spillover effects, cost-benefit analysis of such subsidies requires modelling behavioral responses of both the subsidized household and its neighbors. Using experimental data from Kenya where subsidies were randomized, coupled with GPS-based location information, we show how to estimate aggregate ITN use resulting from means-te...