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Measuring the willingness to pay for social services in developing countries

Author: Paul Gertler; J van der Gaag
Publisher: Washington, D.C., U.S.A. : World Bank, ©1988.
Series: LSMS working papers, no. 45.
Edition/Format:   Print book : Document : International government publication   Computer File : EnglishView all editions and formats
Summary:
This paper provides a methodology for the ex ante evaluation of the welfare effects of proposals to use user fees to finance improved access to social services in developing countries. The analysis requires estimation of demand functions, from which price elasticities and the willingness to pay for improved access can be obtained. The willingness to pay is the maximum price that can be charged without reducing  Read more...
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Material Type: Document, Government publication, International government publication, Internet resource
Document Type: Book, Computer File, Internet Resource
All Authors / Contributors: Paul Gertler; J van der Gaag
ISBN: 0821310496 9780821310496
OCLC Number: 17873751
Description: vii, 30 pages ; 28 cm.
Series Title: LSMS working papers, no. 45.
Responsibility: Paul Gertler, Jacques van der Gaag.

Abstract:

This paper provides a methodology for the ex ante evaluation of the welfare effects of proposals to use user fees to finance improved access to social services in developing countries. The analysis requires estimation of demand functions, from which price elasticities and the willingness to pay for improved access can be obtained. The willingness to pay is the maximum price that can be charged without reducing individuals' welfare and utilization of medical services. The estimation is complicated by the problem that governments in developing countries often are the dominant suppliers of social services in their countries, and provide these services free of charge so that there is little price variation in the data. It is shown how variation in individuals' private time prices can be used to identify all of the parameters of the demand function. The methodology is used to evaluate the possible implementation of the user fee plan for medical health clinics in rural Cote d'Ivoire. The results show that it is likely to have regressive welfare effects. Specifically, the policy is shown to increase the welfare and medical care utilization of individuals in the top half of the income distribution, while reducing the health and medical care utilization of individuals in the bottom.

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Primary Entity

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