NUTRITION & HEALTH YAO PAN

NUTRITION & HEALTH YAO PAN

INTRODUCTION Accumulation of physical capital and human capital leads to growth Human capital: education & health Health: prerequisite for increase in productivity 2/16

INTRODUCTION 3/16

OUTLINE Health facts in developing countries What are the problems? Possible solutions? - nutrition-based poverty trap - micronutrients - preventive healthcare - healthcare supplier

HEALTH FACTS Health: Under five mortality rate Low income countries (1950): 280/1000 Low income countries (2008): 118/1000 Middle income countries (2008): 57/1000 High income countries (2008): 7/1000 Despite great progress there remain large deficiencies in health in developing countries. 5/16

HEALTH FACTS Under-five mortality trends across regions 6/16

HEALTH FACTS Life expectancy in various world regions 7/16

HEALTH FACTS Children s likelihood to die in selected countries 8/16

HEALTH FACTS Proportion of underweight children by hh income 9/16

HEALTH FACTS HIV and death 10/16

HEALTH FACTS HIV/AIDS in Africa 11/16

HEALTH FACTS Causes of these health issues in developing countries Low income, no money to eat and spend on preventative healthcare, no money to go to hospital when sick Income is not the only factor 12/16

HEALTH FACTS 13/16

NUTRITION BASED POVERTY TRAP Famine: widespread scarcity of food, caused by several factors incl. crop failure, population unbalance, or gvt policies. While famine may be history, malnutrition is not. The UN agency FAO estimates that, worldwide a billion people are under-nourished. Symptoms of malnutrition: anemia, low BMI (body mass index), small and thin children. 14/16

NUTRITION BASED POVERTY TRAP With your wage, you buy food, which gives you strength, which allows you to get wages. 2-way relationships: wage è nutrition (how much better do you eat if you have a little more income) nutrition è productivity (how much stronger do you become if you have a bit more to eat) Poverty trap: the poor have lower work capacity è poverty 15/16

NUTRITION BASED POVERTY TRAP S-Shape curve and the nutrition-based poverty trap 16/16

NUTRITION BASED POVERTY TRAP Possible solutions: Food assistance è more food (sustainable?) Agriculture productivity (we will cover later) è more food Market & infrastructure developmentè affordable food Better employment opportunities è more money to buy food 17/16

NUTRITION BASED POVERTY TRAP Would these solutions work? Studies find that when total expenditure per capita increase by10%, food expenditure increases by 7% (why not 10%??). When they get a little more money, people increase the share of the budget going to other things. If food expenditure increases by 7%, the consumption of calories only increases by 3.5% (why not 7%??). When they spend more on food, they also buy more expensive (and better tasting) calories. Even among the very poor, an increase in economic well-being has a positive, but not huge impact on calories consumed. 18/16

MICRONUTRIENTS We saw that the poor did not appear particularly hungry for extra calorie, or extra nutrients And yet, by all accounts they are still not well nourished: - India, 2004, 33% of men and 36% of women were undernourished (BMI below 18.5) - Iron deficiency anemia is believed to affect up to 1 billion of people worldwide What could be happening? 19/16

MICRONUTRIENTS The role of micronutrients Micronutrient deficiency has been described as hidden hunger A randomized experiment in Indonesia - Household were provided iron supplement (fortified fish sauce) or a placebo Anemia was reduced Yearly earning for self-employed workers who were anemic increased by $40 Cost of fortified fish sauce for one year: $6 20/16

IS MONEY THE PROBLEM? Iron fortified fish sauce costs $6 for a year. If the return is $40, it seems that the investment is worthwhile When small cost-sharing was introduced in Kenya in some schools (a few cents), take up went almost to zero. Will the workers reap the benefits? - In Indonesia, wages did not go up for people who worked for a wage: may be the employer does not perceive the increase in the productivity. Why bother 21/16

IS MONEY THE PROBLEM? In India, a free iron fortification program was introduced in some villages - very few people switched to fortifying miller - When they did, if miller stopped fortifying, they did not insist that they must continue Information: - Very difficult to find out on your own: as late as the 70s, scientists thought protein deficiency was the big nutritional problem, not iron or vitamins - Do you trust outsiders that give you information? 22/16

CONSUMPTION IS A DECISION Human beings max their utility, not their productivity Utility is made of other things than how productive you can be - How good the food tastes (hence, perhaps, the prevalence of sugar in the diet of the poor) - Your social status, which may be related to how you spend: funeral, large TV 23/16

WHAT DOES THIS MEAN FOR POLICY? Policies that puts a lot of emphasis on the quantity of food may be misguided, in terms of the benefits they bring Better ideas: -subsidizing double fortified salt purchase, rather than offering free grain (most of which gets lots on the way anyway) - Making it as easy as possible to do the right thing: invent foods people like to eat, and which are good for you (e.g. yams rich in beta-carotene). - Make school meals rich in nutrition 24/16

PREVENTIVE CARE Health investment - Preventive care - Diagnostic care Some technologies known to be effective and cheap to promote good health - bednets for malaria - immunization 25/16

PREVENTIVE CARE These health interventions have high financial returns Hoyt Bleakley: decrease in malaria due to DDT spraying campaign in several countries in the Americas (US south, and several Latin American countries) Started 1955 Compare regions that had different level of prevalence of malaria and across time 26/16

PREVENTIVE CARE Given the high returns, why are people not doing it? 29/16

PREVENTIVE CARE Given the high returns, why are people not doing it? Is it because they think there is something bad with these technologies? But in this case, we would not see such high response to prices So what can it be? 31/16

PREVENTIVE CARE Do people care about their health? Yes, they do: large amount of money spent on health care (up to 7% per month) But most of these is spent on curative care - Large expenses - often for care that is very invasive and of poor quality Two difficulties with preventive care Difficult to learn what works Benefits are in the future, and the cost is now 32/16

PREVENTIVE CARE You take an action that prevents something from happening. A long time after the fact. Drawing the link is difficult If this is against a contagious disease, you may see many non-immunized children who are not falling sick either Present bias - you have no time to do your essay now - but you will (surely) have time later in the semester - same thing for exercising, savings, etc 33/16

WHAT DOES IT MEAN FOR POLICY? Large benefits from making things easy/automatic for people Free Chlorin dispenser right where you collect your water Small incentives for immunization or even compulsory In many cases, the superficial cost benefit analysis gives you the wrong answer (due to elastic demand & large fixed costs) - charging a small amount may be counter-productive - giving people small incentives may save you money 34/16

SUSTAINABILITY IS NOT WHAT YOU THINK IT IS 35/16

PREVENTIVE CARE Learning and trust is another key There can be further benefit to early subsidies, if this leads to learning about benefits. For example bednets (Dupas, 2010) - people who got them were more likely to pay for a second one in the future - neighbors of people who got one for free were more likely to pay for one if they had to pay Because preventive care is hard to teach, need to maintain trust: - Polio vaccine in India & Pakistan - Recovering is very difficult 36/16

TRUST IS FRAGILE 37/16

HEALTH: SUPPLY Study in rural Udaipur (Banerjee): sub-center closed 56% of the time during regular hours. The absence cannot be predicted based on day of week, time of day... Nurses are often absent: 35% on average in a survey conducted by the World Bank People say they do not go to public facilities because of absence and poor treatment. Also the brain-drain of doctors! Supply-side interventions? 38/16

SUMMARY Health facts in developing countries - improving over time but still need improvement What are the problems? Possible solutions? - nutrition-based poverty trap - micronutrients - preventive healthcare - healthcare supplier

READINGS Chaudhury, Nazmul, et al. "Missing in action: teacher and health worker absence in developing countries." The Journal of Economic Perspectives 20.1 (2006): 91-116. Cohen, Jessica, and Pascaline Dupas. "FREE DISTRIBUTION OR COST-SHARING? EVIDENCE FROM A RANDOMIZED MALARIA PREVENTION EXPERIMENT." Quarterly Journal of Economics 125.1 (2010).