Not so small
/One of the favorite criticisms of randomized control trials (RCTs) in development economics is that they answer “small” questions rather than tackling big (macho?) questions like “what are the causes of growth” or “what is the impact of infrastructure investment.” The poster child for this argument has been studies examining whether deworming pills or Insecticide Treated Nets (ITNs) should be given free or sold at a subsidized price. A key target of criticism was a Cohen and Dupas study showing that take-up of ITNs drops sharply with small changes in price while those who pay for a net are no more likely to use it than those who get it for free. Lant Prittchet bemoans the wasted talent of the best and brightest of a generation working on such insignificant questions. Dani Rodrik and Angus Deaton questioned the usefulness of a study that looked just at pregnant women in one part of Kenya.1
But the work on pricing and health proves exactly the opposite point. It demonstrates how impact evaluations can simultaneously answer questions of immediate practical importance for the partner in the evaluation (how many more kids will sleep under a bednet if the price is reduced from 50 cents to free), and help us understand underlying truths about human behavior (do humans value and use something more if we pay for it, do small costs deter us from doing things that are good for us in the long run). These more general questions are sometimes derided as academic but in the long run are particularly important for policy because they tend to generalize better. A series of studies looking at pricing for different nonacute health products in different countries shows remarkably similar results: sharp declines in take-up with small changes in price (summarized here, here, and here).
Equally importantly there is no evidence that the act of paying for something increases use or that charging helps target products to those who are most likely to need them. It challenged the growing call to judge development programs on financial sustainability rather than cost-effectiveness.
This literature fed into a growing understanding of how bad human beings are at making small sacrifices today for long term health payoffs whether that be forgoing chocolate cake, exercising more, or buying prevention products. This understanding of human behavior is feeding into policy.
In the early 2000s a debate raged about whether to charge for ITNs. Advocates of free distribution said small costs could reduce access by the poor. Those arguing for charging cited anecdotes of bednets being used as wedding veils or fishing nets but neither side had much evidence. The RCTs on price and use were quickly taken up by advocates of free mass distribution and the opposition faded.
Coverage of ITNs in sub-Saharan Africa (the region with the highest burden of malaria) has improved dramatically with the vast majority of coverage accounted for by free mass distribution (43 out of 47 countries had mass free programs). As the great maps from Giving What We Can illustrate, malaria cases have fallen dramatically. A recent article in Nature estimates that 2/3 to 3/4 of the decline in malaria cases between 2000 and 2015 can be attributed to increased net coverage: 450 million cases of malaria and 4 million deaths averted from ITN distribution. That’s anything but small.
1As pregnant women and newborns are the most likely to die of malaria this is the policy relevant group to focus on.