Family Planning Programs: Getting the Most for theMoney

At a time when funding for family planning programs is shrinking it is important for donors to know how to get the most change in contraceptive prevalence per dollar spent. By some estimates roughly half of family planning program funds net of labor costs and capital outlays are used to subsidize contraceptive prices. Price subsidies may serve as an important source of income support for families but it is not clear they have been cost-effective in increasing contraceptive use. Although researchers have studied the effect of contraceptive prices on contraceptive demand (commonly measured in terms of price elasticity) virtually none have compared the cost-effectiveness of contraceptive price subsidies to alternative expenditures on quality promotion or distribution. Lacking the data that such research could provide donors and managers have designed programs around the little information that is available. In this case it has often meant using estimates of price elasticity to argue for the subsidization of contraceptive supplies. Harvey for instance used the results of a regression of social marketing condom sales against social marketing condom prices to advance the commonly cited “1% rule” of contraceptive pricing—one couple-year of contraceptive protection should cost less than 1% of per capita income or gross national product. (excerpt)