Health care in developing countries is often unreliable and of poor quality, reducing incentives to use quality health services. Using data from a field experiment in India, I show that providing initial quality care improves the demand for quality health care by raising intended health insurance renewal and subsequent use of quality services. Randomly offering insurance policyholders a free consultation with a qualified doctor has a twofold effect: receiving this additional benefit raises willingness to pay to renew health insurance by 56 percent, exposed individuals are 11 percentage points more likely to consult a qualified practitioner when ill after the consultation.

Clara Delavallade is an Associate Professor in the School of Economics at UCT, a Research Associate of SALDRU and a Research Fellow at IFPRI, c.delavallade@cgiar.org

This project was supported by grants from the International Labour Organization, the Center for Insurance and Risk Management at the Institute for Financial Management and Research, and the University of Cape Town.