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IZA Discussion Paper No. 6560
May 2012
Do Public Health Interventions Crowd Out Private Health Investments? Malaria Control Policies in Eritrea

substantially revised version pubished in: Labour Economics, 2017, 45, 107 - 115

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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Olga Nottmeyer
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+352 585-855-501
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