The Nobel Economics Prize and the Impact of Small Incentives on Immunization Rates: A Study by Abhijit Banerjee, Esther Duflo, and Michael Kremer
Introduction
Abhijit Banerjee, Esther Duflo, and Michael Kremer were awarded the Nobel Prize in Economics for their extensive research on poverty alleviation and development economics, particularly in the realm of public health and education (Banerjee, Duflo, Kremer, 2019). Their work, particularly in the context of immunization rates in India, is a prime example of how even small incentives can significantly impact public health outcomes.
The Problem
In India, immunization services are offered free of charge in public health facilities. However, despite these services, immunization rates remain dismally low in certain areas. The National Family Health Survey (NFHS-3) revealed that only 44% of children aged 1-2 years had received the basic immunization package in India. In rural Rajasthan, this figure dropped to 22%, and even in a disadvantaged population in rural Udaipur, it was less than 2% (Banerjee, Duflo, Kremer, 2019).
Understanding the Low Immunization Rates
The low immunization rates can be attributed to two main issues: unreliability of services and low priority. Nurses and government officials were not consistently available to administer immunizations. Additionally, immunization was not considered an urgent matter by families, as they could always vaccinate their children in the next month. The opportunity cost could be too high for families even if it was relatively low (Banerjee, Duflo, Kremer, 2019).
Intervention Design: A Randomized Controlled Trial
To address these issues, Banerjee, Duflo, and Kremer partnered with Seva Mandi, a grassroots NGO based in Udaipur, Rajasthan. They conducted a randomized controlled trial (RCT) involving 134 villages, with 30 villages receiving intervention A, 30 villages receiving intervention B, and 74 villages acting as a control group (Banerjee, Duflo, Kremer, 2019).
Intervention A: Reliable Immunization Schedules
Intervention A focused on establishing regular availability of immunization schedules. This involved closely monitoring the attendance of healthcare workers, declaring specific timings in advance, and educating mothers on the importance and benefits of immunization. The goal was to enhance the reliability of the immunization services by leveraging the existing government machinery (Banerjee, Duflo, Kremer, 2019).
Intervention B: Financial Incentives
Intervention B also used the same infrastructure but added financial incentives. Parents received 1 kg of raw lentils per immunization administered. On completing a child's full immunization, the parents also received a set of thalis (metal plates used for meals). The value of the lentils was about 40 rupees (approximately three-quarters of a day’s wage for low-income families). The thalis were chosen to highlight the achievement and were of immediate use (Banerjee, Duflo, Kremer, 2019).
Results of the Interventions
Compared to the control group, immunization rates more than doubled in intervention A villages and increased by more than six times in intervention B villages. Notably, there were no adverse events or severe reactions to immunization reported in either intervention group (Banerjee, Duflo, Kremer, 2019).
Economic Analysis
The cost analysis revealed that the average cost to Seva Mandir of fully immunizing a child was 27.94 rupees (1102 rupees or ￡16, €19) per camp with incentives and 55.83 rupees (2202 rupees) without incentives. The difference primarily came from the fact that camps with incentives had to be open from 11 am to 2 pm regardless of the number of children present, spreading the daily fixed cost (mainly nurse and assistant salaries) over more children. The marginal costs were 6.60 rupees and 1.30 rupees for camps with and without incentives, respectively (Banerjee, Duflo, Kremer, 2019).
Moreover, if the same interventions were implemented by the government, the average cost of fully immunizing a child was estimated at 25.18 rupees without incentives and 17.35 rupees with incentives (Banerjee, Duflo, Kremer, 2019).
Implications and Future Research
The findings of this study demonstrate the effectiveness of small incentives in improving immunization rates and healthcare adherence. These insights have inspired the creation of the Jameel Poverty Action Lab (J-PAL), founded in 2003 by Banerjee, Duflo, and Sendhil Mullainathan. J-PAL supports randomized evaluations measuring the impact of interventions against poverty in various sectors, such as agriculture, health, governance, and education (Banerjee, Duflo, Mullainathan, 2003).
The work has been critically important in understanding how small incentives can persuade the public to make decisions that benefit their health. By replicating similar experiments in different populations across 80 countries, J-PAL aims to further refine and apply these insights to improve public health and economic outcomes globally (Banerjee, Duflo, Mullainathan, 2003).