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Do public health interventions crowd out private health investments? Malaria control policies in Eritrea

Authors: Pedro Carneiro , Tewolde Ghebremeskel , Joseph Keating and Andrea Locatelli
Date: 18 May 2012
Type: cemmap Working Paper, CWP12/12
DOI: 10.1920/wp.cem.2012.1212


It is often argued that engaging in indoor residual spraying (IRS) in areas with high coverage of mosquito bed nets may discourage net ownership and use. This is just a case of a public program inducing perverse incentives. We analyze new data from a randomized control trial conducted in Eritrea which surprisingly shows the opposite: IRS encouraged net acquisition and use. Our evidence points to the role of imperfect information. The introduction of IRS may have made the problem of malaria more salient, leading to a change in beliefs about its importance and to an increase in private health investments.

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