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

Liang Bai, Benjamin Handel, Edward Miguel and Gautam Rao

Department of Economics, Working Paper Series from Department of Economics, Institute for Business and Economic Research, UC Berkeley

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.

Keywords: Economics; Applied Economics; Prevention; Clinical Research; Good Health and Well Being; Econometrics; Banking; finance and investment; Applied economics (search for similar items in EconPapers)
Date: 2021-12-02
New Economics Papers: this item is included in nep-evo, nep-exp, nep-hea and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: Self-Control and Demand for Preventive Health: Evidence from Hypertension in India (2017)
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