School-Based De-Worming Treatments in Kenya
Introduction
Baird et al. (2016) study the long-run impact of community-wide deworming for schoolchildren in Kenya. The treatment was randomized across schools in Kenya and the authors find that program increased educational attainment and later-life earnings for the treated children. The authors note that the increased tax revenue paid by the children in treatment schools is sufficient to pay for the upfront cost of the treatment. Finkelstein and Hendren (2020) translate this example into the MVPF framework and note that it implies an infinite MVPF.
Pays for Itself
Net Cost
Baird et al. (2016) compute the net cost of deworming treatments to be $1.42 per person treated, or $1.07 per child in a deworming treatment school due to the average take-up rate of 75%.
In addition to this upfront cost, there is are several sources of fiscal externalities that the authors incorporate. First, children in treated schools go on to have higher educational attainment. While this may lead to later life earnings increases, at the outset there is an increase in cost to the government from the cost of this schooling. The authors estimate this cost to be $11.
Second, there is an increase in earnings that leads to an increase in government revenue. The authors estimate an increase in the NPV of earnings of $142 (using an 11% interest rate consistent with historical experience in Kenya). That earnings estimate results an increase in the NPV of tax revenue of $23. This implies that the net cost to the government is $1.07 + $11 – $23 = -$11. This means that the increased tax revenue leads the policy to pay for itself.
Willingness to Pay
The authors measure a range of significant benefits to the treated individuals, including improved health, greater educational attainment, and higher earnings. The authors do not quantify all of these benefits, but note the increased after-tax income is $119, which is reported here as a lower bound for completeness.
MVPF Summary
The negative net cost combined with positive benefits implies that the policy has an infinite MVPF.
References
Baird, Sarah, Joan Hamory Hicks, Michael Kremer, and Edward Miguel (2016). “Worms at work: Long-run impacts of a child health investment.” The quarterly journal of economics 131(4): 1637-1680. DOI: https://doi.org/10.1093/qje/qjw022
Finkelstein, Amy, and Nathaniel Hendren. “Welfare Analysis Meets Causal Inference.” Journal of Economic Perspectives 34.4 (2020): 146-67. https://pubs.aeaweb.org/doi/pdf/10.1257/jep.34.4.146
Policy Features
- Category
- Social Insurance
- Sub-Category
- Child Health
- Beneficiary Type(s)
- Children and Youth, Children under five
- Average Age
- 9
- Country of Implementation
- Kenya
- Year of Implementation
- 1998
- Empirical Method
- RCT
- Research Type
- Primary
- Peer Reviewed
- Yes
- MVPF Publication Link
- doi.org/10.1093/qje/qjw022