Empty Pockets: Estimating Ability to Pay for Family Planning

Russell A Green, University of California at Berkeley

This research measures the extent of global reliance on international aid for family planning services and donated contraceptives and provides a gauge of the potential for cost recovery. We present a national measure of consumers'' ability to pay for contraception for 103 aid-dependent countries. We construct the measure using estimates of the cost of family planning, income distributions and an assumption that one percent of income goes towards family planning. The results show that quite a large portion of aid-dependent nations is unable to afford contraception. We include the measure of ability to pay in a model of contraceptive prevalence. Ability to pay significantly explains contraceptive prevalence, implying that it is a barrier to usage. We construct a rough test of the potential of cross subsidization, indicating that raising income levels is more important than income redistribution. This research would suggest that caution be exercised in cost recovery programs.