The economics of malaria net distribution

by on October 9, 2007 at 8:16 am in Economics | Permalink

In 2000, a world health conference in Abuja, Nigeria, set a goal: by
2005, 60 percent of African children would be sleeping under nets.  By
2005, only 3 percent were.

It turns out that handing nets out for free works much better than branding them, marketing them, and selling them, albeit at subsidized prices.  And when there are enough insecticide-laden nets in a village, mosquitoes avoid the place altogether (after the very first net, however, the mosquitoes simply move on to another nearby hut).

The sad fact is that the best insecticide-filled nets last no more than three to five years. And is this good or bad news?

…sales of malaria pills were way down.

Here is the full and fascinating story.  Eternal vigilance is the price of foreign aid, or something like that…

1 sa October 9, 2007 at 9:16 am

Dropping malaria pill sales is good news from my prespective. Unlike developed countries Africa ddoesn’t have a vigorous counterfiet drugs program and nor can it’s citizens distinguish without a costly marketing campaign.

Nets are easier to inspect for quality(look ma, no holes) and have lower marginal costs per user than pills.

I am puzzled that nets don’t sell for a price. Is the average african so poor that he can’t afford a mosquito net which can increase his life expectancy by many years, but which he uses for free. There is some signalling going on in the village communities as well although I can’t put my finger on it.

Also, the most important question what happens to nets after they are dumped?

2 Steven October 9, 2007 at 10:27 am

What are your thoughts about the possibly more effective way to treat malaria – DDT?

3 happyjuggler0 October 9, 2007 at 11:37 am

I’ve long been sceptical of both mosquito nets and indoor spraying, noting that people go outside from time to time!!!

However, if you reach a critical mass and mosquitos avoid the village altogether as a result, then that is a horse of a different color. Hopefully this is true instead of mere politically correct propaganda from those who are ideologically opposed to DDT spraying outdoors in an attempt to eradicate the damn parasites once and for all.

4 Tony K October 9, 2007 at 2:18 pm

For SO who said:
“What struck me as odd is that if the people really wanted something, they’d find a way to get money to buy it. They manage to buy $50-200 cell phones and $800 motorcycles, why wouldn’t they be willing to buy a $1 mosquito net to prevent malaria? Is it that they don’t care, or that they expect to get them for free?”

I think that in a lot of countries with what I would consider relatively low probabilities of surviving to the next year, people tend to put more focus on short-term things. Likewise in places with unstable economies, the focus tends to be on the very short term.

I have witnessed these biases in South America and Africa. US and Europe tends to have longer term perspective of things.

It’s not that they expect them for free, just that they see limited utility if they’re just going to die from something else anyway.

5 jean October 9, 2007 at 3:10 pm

DDT?
Thanks to american and european enviromentalist if you tried to use it you would be called at least a murderer. No matter if malaria kill more people than aids

6 SM October 9, 2007 at 5:59 pm

I find it very sad to read that the goal for the net distribution was not met by the African governments. I think that it would be better to give the nets out for free rather than spending money on health care for the children that will get malaria because of no nets. Even though the opportunity cost would be the money the governments could make from marketing the nets, I feel that in the long run it will help out the economies of the countries in Africa and overall make it safer for the children. The malaria pill sales went down because the demand for them went down as well. People have free anti- mosquito nets, so why would they buy pills? And even though the nets might last three to five years, logically one could think that there will be healthier people living in Africa, and hopefully there would be more job opportunities for these people, possibly making future nets when the old ones wear out.

7 dsquared October 10, 2007 at 3:49 am

[They manage to buy $50-200 cell phones and $800 motorcycles, why wouldn’t they be willing to buy a $1 mosquito net to prevent malaria? Is it that they don’t care, or that they expect to get them for free?]

remember that lots of Africans have pretty good resistance to the local strain of malaria. An otherwise healthy young man or woman (who I would guess is the market for cell phones and motorbikes) in an urban or semi-urban area isn’t necessarily going to want a mosquito net over his or her bed, not least because they are really quite uncomfortable on hot or stuffy nights. The priority for bed nets is children, old people and pregnant women.

8 Greg Laden October 10, 2007 at 10:03 am

Very interesting discussion:

SA: You are thinking too much like an economist :)! If the average African can just barely afford a net, that means half can’t afford it. There is a strong correlation between malarial infection rates and total lack of money. There are geographically large areas of Africa that are the main reservoirs for the disease where there is virtually no cash economy. Selling the nets in the absence of a cash economy is problematic.

I’ve written a fairly extensive post outlining some of these problems:

http://gregladen.com/wordpress/?p=1460

GS: Not really. Increasing a price or charging a price (in the particular setting of the paper you cite) increases the rate of use among buyers, but it does so by screening out those who will not use it. This actually has the net effect of decreasing the total number who will use it.

Also, there is a strong cultural understanding linking the mosquito to the disease across Africa, but not so much with water born illnesses. So I would expect the psychology to be different. Furthermore, I question if the urban setting will be the same as a rural setting both culturally and in relation to the fact that urban settings tend to have a cash economy but rural settings can have as little as zero actual cash circulating … so analysis of pricing effects are utterly meaningless.

Happy Juggler: The mosquito that transmits malaria is nocturnal and not gregarious, and easily identified by sight by people who understand that it is a deadly animal. In affected areas of Africa, the normal pattern is for people to become become very vigilant of these mosquitos as evening comes on. Any such insects that show up die. The mosquitos that bite people do so later when they are sleeping. So yes, in the cultural, behavioral, and ecological context of tropical Africa, one would expect nets to work, and they do.

SO and others: There are huge differences across the continent in urban vs. rural, even between countries in how much of either is populated. You make good points but of course it isn’t really true that a typical Liberian can get whatever he wants if he really wants it. What if he really wants a Humvee? Or to not have his child get malaria?

Joan: regarding vaccine … unfortunately, it simply is not the case that a vaccine is easily developed. There is no good reason why one would not already exist if so, as more research has gone into the development of a malarial vaccine than any other vaccine in history. There are biological and technical reasons for this. The reason you often read that “the vaccine is near” is because this is very very big business, and no one working on a vaccine is going to put out a press release saying “We are utterly despondent.. there is no hope for this working” But every time there is hope, you hear about that.

9 Greg Laden October 10, 2007 at 2:57 pm

Jean: For what purpose? As a foray into historical fiction?

10 Greg Laden October 10, 2007 at 8:13 pm

” Critiques Of Libertarianism” … Nice site, Mike. Lots of good stuff over there.

11 Greg Laden October 11, 2007 at 10:27 pm

April,

You sort of have a point, but no, the article in the NYT does not say anything very different than what you are saying here, if you actually read the article from beginning to end and pay attention.

Happy about spreading around DDT? Maybe it will work and perhaps it is needed, but I don’t think you would be very happy were it happening in your very own bedroom…. I mean, really…

12 Greg Laden October 12, 2007 at 7:29 am

Brian:

One thing to keep in mind, that may make it at least feel a little better, is that this is a many-decades long situation. The net impregnation and distribution idea is brand new, in the long view of anti-malaria efforts. If over the next year most of the money that is allocated to buy nets is actually used to purchase nets, and most of those nets get into use in malaria areas Regardless of how they get there), then that will the the first time in the history of funding an anti malaria program where more than a about 10 or 15 percent of the funds were used for the actual work rather than promotion, consulting, higher-ups taking expensive vacations, etc. etc.

Curing or fighting malaria helps the little brown people. There is no watchdog in the US or Europe making sure that most anti-malaria money is not stolen or misused before it gets into the field or into the lab, so, Free Market Forces being what they are, most of the money is in fact misused or stolen.

IF you used half the available money to buy/make the nets, and dropped them all from a high-flying airplane roughly over the malarial areas, and let the rest sort itself out, you would be doing better than the programs designed by economists, advised by scientists, and administered by bureaucrats.

One of the great fallacies of the “market” distribution method is the assumption that a good will not generate a price unless a government official or economist puts a price on it. If yu want to know how to spread this stuff around, use the model that the Pharmacy companies use to dump their old vials of injectables that are overdate and would otherwise cost money to eliminate. Show up in Kinshasa with a barge full of mosquito nets, leave it unguarded for a month, and pretty soon everyone will have a mosquito net.

Anything, anything, but planning it all out with consultants and expensive lunches and costly reports!

(OK, maybe I’m being slightly over cynical)

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