The Importance of Household Responses to Competing Disease Risks

Child mortality is a persistent problem in sub-Saharan Africa that policymakers have up to now been unable to solve. The Millennium Development Goals set the bar for progress at a two-thirds reduction by the year 2015 (UNDP 2011). However, there has been nowhere near sufficient progress to meet this goal. While the child mortality rate in sub-Saharan Africa had fallen from 18 percent in 1990 to 13 percent in 2009, the total number of child deaths has increased from 3,937,000 in 1990 to 3,976,000 in 2009. Additionally, the share of under-five deaths coming from Sub-Saharan Africa increased from 31 percent in 1990 to 50 percent in 2009 (UNICEF et al. 2010). Policymakers seeking to reduce child mortality and meet this goal have long sought to identify what programs are effective and why, but up to now have been unsuccessful. A common explanation for this failure is that health production is a complicated process that depends on many interrelated health inputs that all involve choices (Rutstein 2002). I thus argue in this dissertation that understanding how households make decisions about investment in interrelated health inputs is essential to improving child health. Here I focus specifically on how households respond to competing disease risks in making health input decisions. I argue that a better understanding of this decision-making process will enable policymakers to answer key questions about why programs are effective in reducing child mortality. Here I have specifically addressed two questions: 1) why does the effect of the same program differ by program site and 2) why do families spend little on disease prevention and have high price sensitivity for it when they spend relatively large amounts on medical treatment. I developed a theoretical model of household allocation with competing disease risks for children to demonstrate that household will respond to child health programs by investing in more disease prevention for their children and that this response will differ by determinants of household allocation to children. This differential response will lead to mortality effects that vary by these determinants of household allocation. I developed an additional theoretical model of parents’ decisions to invest in disease prevention or spend on medical treatment in the presence of competing disease risks. I demonstrated that high levels of competing disease risks will decrease investment in disease prevention, increase price sensitivity for prevention, and increase the use of medical treatment when sick. I applied these two models to the questions raised above and evaluate them empirically using data from sub-Saharan Africa. I find empirical support for both models.