Where preventative health products are hard to sell
In developing nations, simple measures could prevent deaths
More than 10 million children die each year in developing nations across the globe, according to research co-authored by Sarah Walker, a lecturer in the school of economics at UNSW Business School. ?
Many of these deaths could be prevented by relatively simple measures. Shoes could be worn. Mosquito nets could be put above beds. Soap and clean water could be made more readily available.
If parents were better informed that these inexpensive choices could save their child’s life, surely they would take that option? Apparently, it’s not that simple.
“We find that information doesn’t have any effect on people’s investment in shoes, soap, hygiene or vitamins,” Walker says.
Walker and co-authors Jennifer Meredith, Jonathan Robinson and Bruce Wydick have been investigating which interventions most effectively stimulate demand for a preventative health product, such as a pair of rubber shoes.
The team conducted a set of field experiments in four countries – three smaller studies in Guatemala, India, and Uganda, and a larger study in Kenya – and has published the results in Keeping the doctor away: Experimental evidence on investment in preventative health products.
Their findings are surprising. It seems counter-intuitive that a parent wouldn’t immediately react to information about a simple change that could prevent their child being struck down by a life-threatening illness.
“It could simply be that people face various competing options for health investments, and this wasn’t one that people deemed important, given their limited funds,” Walker says.
“I know from [other research] literature that in developing countries like Kenya, where people are very poor, the majority of cash-on-hand is spent only when there is an actual health crisis.
“People get malaria and they have to go to the doctor and get drugs and this is where a lot of disposable income goes. [So], how do we incentivise people to actually invest in prevention, so they are not disturbed by these large shocks later on?”
‘People know that shoes are good, but they don’t have the cash on hand to purchase them’SARAH WALKER
Perhaps if people saw their neighbours getting on board with a certain preventative product, they would also see it as an acceptable expense. This would seem an intuitive assumption but it, too, has been proven incorrect.
Peer pressure does little to change the behaviour of families around investing in preventative health products – in developing nations, at least.
“We don’t find that there are any peer effects in terms of investing in rubber shoes, but that doesn’t mean peer effects are not important for preventative health at large,” Walker says.
“Other papers find they matter in terms of adopting things like bed nets, which prevent diseases like malaria. Our takeaway from the peer effects part of the study, I think, is that it is very context specific. It depends on the kind of health investment you’re making.
“So peer effects are likely to have a larger effect in regard to newer technologies like bed nets, [rather] than older products such as shoes. People know that shoes are good, but they don’t have the cash on hand to purchase them. They don’t need to learn from their peers the value of shoes – they already know that.”
So what does work? When most marketers and policy-makers struggle with far simpler and less dramatic challenges, what changes alter buying habits when the stakes are as high as the life of a child?
A household’s cash liquidity, or money at hand, is a major issue. Walker’s work shows that greater savings, or cheaper prices of goods, will increase a household’s likelihood to purchase preventative health products.
But in many developing nations this comes with an added twist. Research has revealed that in certain societies where individuals and families are part of a communal structure, those with money are expected to share their resources with the village, Walker says. In the absence of banks or any other convenient place to keep one’s money, wealth is never a secret. Have-nots in a village will ‘tax’ the haves.
If a family develops a business that does well, or comes into money some other way, it will not be long before that money is spread among that family’s community group.
Along these lines, another academic study in Kenya, by Pascaline Dupas and Jonathan Robinson, looked into the effects on savings when households in communal structures were given a locked box in which to keep cash.
The paper, Why don’t the poor save more? Evidence from health savings experiments, reported that “…providing individuals with simple, informal savings technologies can substantially increase investment in preventative health and reduce vulnerability to health shocks. Simply providing a safe place to keep money was sufficient to increase health savings by 66%.”
'It is no secret that investing in preventative health reduces costs for the individual and for society'SARAH WALKER
Count on the women?
Targeting women with health messaging, and with opportunities to purchase preventative health products, can have a positive effect. While still context dependant, in this experiment the marketing of health products to mothers increased investment, while the marketing to fathers made little difference.
Walker says it is no surprise to economists that women are more inclined to save than men, especially when driven by the motivation to keep children healthy.
“Women are just more likely to make these preventative investments than men. This is why time and time again in developing nations interventionist policies prefer to target women in terms of finance.
“I don’t know, in regard to health investments, whether that has been replicated in developed economies. But in regard to willingness to take risk, I have seen it in developed and less developed countries. Women are typically less likely to take on risk.”
And in considering developed economies, are there lessons from this research? For instance, the dental industry in Australia struggles to convince sectors of the population to have regular check-ups rather than visiting only when they experience a dental emergency. Could that profession, and others, learn from the work being done in developing nations?
“It is generalisable, to an extent,” Walker says. “It is no secret that investing in preventative health reduces costs for the individual and for society.
“We see many similar health interventions popping up here and in other developed nations. For instance, most of my experience comes from the US where they have health savings accounts into which you can put a portion of your pre-tax pay cheque. The money is only to be used for health purposes and often complements existing health insurance plans – not dissimilar to the locked box experiment in Kenya.
“We are seeing major public preventative health initiatives in Australia, the US and Europe. This type of knowledge, from studies in developing nations, may guide policy-makers in helping people focus on prevention, rather than just treating acute symptoms.”