Health Investment and Agricultural Productivity

Interviene: Guenther Fink, Harvard School of Public Health

Organizzato da: Dipartimento di Economia

Abstract: In this paper, we investigate the effect of preventive health investment on agricultural productivity in the context of small-scale cotton farming in rural Zambia. We develop a theoretical framework to show that with the harvest as only source of income and stochastic yields farmers always choose investment levels below the profit-maximizing level. To evaluate farmers’ willingness to invest in morbidity prevention as well as the returns to such investment, we randomly assigned 516 small-scale cotton farmers in rural Zambia to bed net loan programs. Under the loan programs, farmers could acquire nets at the beginning of the season, and repay them with zero interest after the completion of the harvest. We show that despite the large perceived and realized productivity increases attributable to malaria prevention, farmers’ willingness to invest into bed nets is limited even when financing and transaction costs are reduced to a minimum.