Learning, Misallocation, and Technology Adoption: Evidence from New Malaria Therapy in Tanzania

Abstract

I study how the misallocation of new technology to individuals who have low ex post returns to its use affects learning and adoption behavior. I focus on antimalarial treatment, which is frequently over-prescribed in many low-income country contexts where diagnostic tests are inaccessible. I show that misdiagnosis reduces average therapeutic effectiveness, because only a fraction of adopters actually have malaria, and slows the rate of social learning due to increased noise. I use data on adoption choices, the timing and duration of fever episodes, and individual blood slide confirmations of malarial status from a pilot study for a new malaria therapy in Tanzania to show that individuals whose reference groups experienced fewer misdiagnoses exhibited stronger learning effects and were more likely to adopt.

The Local Influence of Pioneer Investigators on Technology Adoption: Evidence from New Cancer Drugs

“…While previous research has documented an extensive role of social learning in determining technology adoption in developing countries (Conley & Udry, 2010; Adhvaryu, 2014), we may expect little role for local information frictions in this setting where adoption decisions are made by expert physicians with high human capital and ready access to scientific information. On the other hand, it is a setting with substantial uncertainty about the efficacy and appropriate applications of newly introduced drugs.…”

Short-Run Subsidies and Long-Run Adoption of New Health Products: Evidence From a Field Experiment

“…The empirical evidence provided in this paper suggests that, at least for some class of preventative health products, learning by doing and social learning are important channels through which short-term, targeted subsidies can affect long-run adoption. The extent to which these results would apply to curative health products may vary depending on the availability of information on the true underlying cause of illness (Adhvaryu (2012), Cohen, Dupas, and Schaner (2013)) and the counterfeit prevalence (Björkman, Svensson, and Yanagizawa-Drott (2012)). …”

“…Besides contributing to the literature on pricing and user fees for health products, and to the lively policy debate on free distribution versus cost-sharing, our paper contributes to a growing literature on the role of learning-by-doing and social learning in technology adoption in poor countries (see Foster and Rosenzweig (2010) for a review; and Munshi and Myaux (2006), Adhvaryu (2012), and Oster and Thornton (2012) for learning about health technologies in particular). Our paper also contributes to the empirical psychology and economics literature, testing behavioral economics in the field (see DellaVigna (2009) for a review), and complements earlier papers that have estimated, in rich countries, how the willingness to pay for a product can be affected by anchors (Ariely, Loewenstein, and Prelec (2003)), previously encountered prices (Simonsohn and Loewenstein (2006), Mazar, Koszegi, and Ariely (2009)), or the range of options available (McFadden (1999), Heffetz and Shayo (2009)).…”

Technology Adoption under Fit Risk: What Should Development Project Donors and Managers Know?

“…Reyburn et al (2004) reports that the rate of misdiagnosis of malaria in Tanzania is over 50% among individuals who received treatment for malaria at government hospitals [4]. The misdiagnosis of malaria and misallocation of treatment affected social learning and decreased new malaria therapy adoption rates [5].…”