Information Barriers to Social Health Protection in Pakistan

Health care decisions are sometimes a matter of life and death, but also their financial consequences can be disastrous for many households around the world. While it is easy to imagine how the fear of making an expensive mistake may deter particularly poor households from making otherwise sensible health care choices, there is almost no scientific evidence on the importance and joint role of medical and financial uncertainty. In this paper, we provide theoretical insights based on simulation exercises, develop a novel measurement instrument for medical and cost uncertainty related to health investment choices, present data collected using this instrument from low-income households in Pakistan, and test the theoretical predictions using this data. Our analysis reveals that on top of many biases, both medical as well as cost uncertainty in health care decisions exists to a substantial degree. The empirical results regarding the influence of beliefs are largely in line with theoretical predictions and suggest that uncertainty in both dimensions deters health investments. Our results indicate potentially large dividends to providing accurate information.

Speaker:

Prof. Dr. Andreas Landmann, Friedrich-Alexander-Universität Erlangen-Nürnberg

Attendance:

To join the seminar, please send an email beforehand to tevin.tafese@giga-hamburg.de