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Lecture 6

ECON 30801 Lecture Notes - Lecture 6: Mosquito Net, Human Capital, Demand Curve

Course Code
ECON 30801

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HEALTH - 2/22-3/2
I. Micro side of health
A. Why do we care about health?
1. Directly affects welfare
2. Spills over into other important factors: education, human capital
a) If people aren’t sick, they can go to school and join the workforce;
so can family members who may have had to take care of them
otherwise, etc.
B. Simple Health Problems
1. Malaria - 396 million cases every year
a) 1.2 million people die every year
b) 90% are children under 5 years old
c) We already KNOW what limits malaria - most widely used are bed
nets (incredibly cheap and effective, maybe $3/year), also some
insecticides and pesticides
d) Not just a problem with Malaria that people aren’t using what will
help protect them
(1) Clean water - 1.8 million people die from diarrheal diseases
every year - 42% of the world population lives without a
toilet - we know how to clean water with chlorine, and it is
very cheap
2. We have the technology and the science figured out to save people from
these diseases
a) This is a SOCIAL SCIENCE problem
b) Individual economic agents interact with health technologies, and
somewhere in this interaction, things go wrong
(1) Why don’t people use seemingly beneficial health
3. Bed nets, chlorine, etc., are preventative care → difficult to assign benefits
a) If you don’t get malaria, is it the bed net, or did you just not get
b) Needs a sufficiently long time horizon
c) Requires understanding of benefits, sufficient trust in health
(1) Have to convince people that diseases and health issues are
real and that the things that are out there to prevent diseases
actually work
(2) Ex. - autism/vaccination propaganda
d) People prefer remedial care to preventative care
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