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In development, there is considerable debate and uncertainty about two related concepts: whether the poor can pay for important health products and whether paying customers value these goods more than recipients of hand outs. The first is a question of whether or not people have the resources and are even willing to pay for basic health products like anti-malarial bednets or water purification filters or tablets.
As an investor in a long-lasting bednet manufacturer in Tanzania, we know that people are not willing to pay the full cost of the bednets, but they are willing to pay for subsidized nets. Just how big a subsidy is required is a question that we are exploring right now with Professor Pascaline Dupas of Dartmouth. With the support of Sumitomo, the Exxon Mobil Foundation, and an anonymous donor, we are conducting a randomized trial to find the price at which people will buy them. We are also reviewing the literature to see if there is a definitive opinion on whether people who buy nets vs. those who receive them for free are more likely to invest the time and energy into figuring out how to use them properly, and ultimately receive the health benefit of reduced exposure to mosquitoes with proper use of the bednet.
This study from the Poverty Action Lab takes up the same set of questions for water purification tablets in Zambia. The findings are fascinating, and show that in this experiment, people who paid for the Clorin were more likely to use it than those who were given it. The next step is to study whether a market for public health products can be an important complement to other essential government and NGO strategies to reach those in need with access to clean water or preventative health products and medicines.
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Brian,
Is an alternative to try to reduce per unit costs by manufacturing abroad? Have you investigated the possibility of sourcing to have such nets made elsewhere and using this organization to either do final assembly (in reducing tariffs if there are any) or assist in distribution?
I manage a contract manufacturer in China and we are working with a client to jointly develop a healthcare products firm with distribution in North America - but point being is that everything is sewn.
I am hoping that you do not see this as merely a shameless plug but I have been looking for an organization that we can work with in the developing world. I worked for 6 months with Faulu Uganda, a microfinance agency in Uganda on behalf of a donor organization in Canada and development has been an interest of mine for quite some time.
My company currently mostly does aluminum extrusions and fabricated steel parts though our expertise does now extend to sewn and woven products because of this new venture; so please let me know if there is anything we can do to help.
Best regards,
Clement Wan
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