Health care demand studies in developing countries : a critical review and agenda for research

This paper reviews the existing literature on HDS"s, describing their conclusions, highlighting the methodological aspects where disagreement exists, and pinpointing areas where more research is needed. The report finds that most HDS"s have placed a disproportionate emphasis on the effect of price on demand and have often overlooked the influence of changes in non-monetary, facility-specific variables (e.g., quality of care, travel distance to the facility), and consumer and environmental variables. This analysis suggests that HDS findings depend largely on the behavioral assumptions made and on the statistical techniques used to estimate demand equations. The report also shows that HDS"s have tended to overlook such issues as consumer behavior under uncertainty and the desirability of health insurance. Few have assessed systematically the simultaneous effects of alternative fee structures on consumers" welfare and health facilities" financial performance. When defining the price and quality of health services, some HDS"s contend that facility-reported price must be used to explain demand decisions, while others argue that consumer-perceived price and quality are the relevant measures. Several methodological aspects of HDS"s deserve further discussion, particularly the adequacy of alternative statistical techniques and of consumer behavioral models, the definition of illness, the choice of recall period, and the measurement of socioeconomic status.