The Demand for Health Care Services in Rural Tanzania

This paper examines the pattern of health care demand in rural Tanzania. We distinguish between hospital and clinic-based care, in both the public and private sector using a two-level nested multinomial logit model. Own price elasticities of demand for all health care options are high, although less so for public clinics and dispensaries than other choices. However, there is a high degree of substitution between public and private care. Consequently, price increases or user fees will result in small percentage of people opting for self-treatment. Another important contribution of this paper is that the quality of medical care has large effects on health demand. This applies to the quality and availability of doctors/nurses, drugs and the clinic environment