Demand for Qualified and Unqualified Primary Healthcare in Rural North India

Abstract

Currently, India’s limited regulation on outpatient healthcare services enables unqualified, and potentially untrained, healthcare providers to operate widely in the market. Free market entry of healthcare providers, coupled with price variability for government doctor services and wide variance in consumers’ perception of healthcare provider quality makes for a dynamic market. The “free market” characteristics of rural outpatient healthcare provide a rich context to test the role that prices, alongside consumer perceptions of healthcare provider quality, play in determining consumer choice of healthcare provider. However, principal agent characteristics of north India’s outpatient market suggest that the market is not competitive. Using the economic framework of consumer demand, this thesis presents a comprehensive empirical analysis of consumer demand for outpatient healthcare treating a fever in rural north India. More specifically, the study incorporates revealed preference (RP) and stated choice (SC) survey data in estimating the demand models. In so doing, a number of explanatory preference and perception variables are demonstrated as important in estimating the demand for village-based unqualified private healthcare providers (known in Hindi as jhola chhaap) and qualified government and private healthcare providers.