Intra-Household Spillover Effects of a Health Program: Evidence from Rural Bangladesh

Anoshua Chaudhuri, University of Washington

This study investigates the intra-household spillovers generated by a Maternal and Child Health program in rural Bangladesh. The impact of this program on the health of non-targeted individuals living in targeted households is examined. A theoretical model is developed to describe the mechanisms through which this spillover can occur; i.e. through an income effect, a household public good effect and a contagion effect. Using a reduced-form demand approach and data from the Matlab Health and Socio-Economic Survey of 1996, results indicate a significant spillover impact on the health of the non-targeted elderly women. This paper therefore concludes that the health program generates positive externalities, which if not accounted for, can lead standard cost effectiveness analyses to understate their true benefits. This raises important issues for the design of public policy programs.