Do contraceptive prices affect demand?

Abstract

Government-sponsored family planning services in developing countries have traditionally provided free contraceptives to couples who choose to contracept. The advisability of and need for such extensive subsidization is brought into question in this article, based on studies that have compared free and fee-for-service family planning programs. Little difference in demand exists between free and moderately priced services. The importance of price in determining family planning demand is also explored through studies of demand shifts in response to changes in contraceptive prices. Contraceptive price increases in established programs have generally had a minimal effect on utilization. Price reductions in established programs, however, have led to increases in contraceptive demand. These findings suggest that moderate fees can be imposed for family planning services without affecting demand; however, full cost recovery may pose a deterrent to low- and moderate-income couples.