Learning and Reputation with Asymmetric Information as Seen in Rural African Health Care

This project investigates the role of patient information concerning multiple

aspects of quality in the health sector of Tanzania, and how this information

changes and is updated when quality changes.

In Tanzania, as in most African countries, patients, even the poor, have a

number of choices when they seek care. Although it may involve significant

additional expense, patients frequently bypass one facility to seek care at a

more distant facility. Differences in quality can explain this phenomenon.

However, it is widely held that patients cannot directly evaluate many aspects

of quality in health care. Patients know that one facility is cleaner or has a

more polite staff, but they do not know the quality of their consultation or

prescription. They seek the services of a professional because they do not know

what professionals know, and this leaves them unable to fully evaluate the

services they receive.

This project collects a unique data set in which patient choices are matched

with objective measures of a variety of aspects of quality as evaluated by

other physicians. Though patients cannot directly evaluate all aspects of

quality, another doctor can. The data depicts patients' willingness to incur

additional travel cost for different objective aspects of quality.

Preliminary analysis of an earlier round of data collection has shown that

patients know about unobservable aspects of quality. The additional round of

data quantitatively characterizes the method by which patients learn about

something that they cannot directly observe. The data depicts quality that

varies between facilities, between the various organizations that provide

health services in Tanzania, within these organizations and over time. Using

this data, the project reveals whether patients assign reputations to

organizations, management practices within organizations, individual

facilities, or even individual doctors. It addition, it depicts the speed with

which patients update their information about quality.

The manner and speed with which patients learn and update information

about quality has important implications for the future of decentralization,

privatization and regulation of health services in Tanzania and Africa in

general.