Journal of Finance and Economics

Journal of Finance and Economics

ISSN: 2291-4951 (Print)    ISSN: 2291-496X (Online)

Volume 2 (2014), No. 4, Pages 50-67

DOI: 10.12735/jfe.v2i4p50

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Social Capital and Willingness to Pay for Community Based Health Insurance: Empirical Evidence from Rural Tanzania

Charles Tundui1  Raphael Macha2 

1Faculty of Social Sciences, Mzumbe University, Tanzania
2Department of Economics and Statistics, the University of Dodoma, Tanzania

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This study examines the effect of social capital on willingness to pay (WTP) for health services provided through community based health insurance schemes (Community Health Fund) in Tanzania. The study covered 274 household heads. We use probit regression analysis to model the relationship between the predictors and our outcome variable. Our results have shown that with the exception of religion, all other social capital variables have a positive and significant impact on the WTP for the Community Health Fund (CHF). Specifically, membership in social organisations and networks, trust among community members and trust of community members on scheme management are positively and significantly related to WTP. On the other hand, the age, education level, household size and number of children and participation in health insurance are not predicting WTP for CHF. Taken together, these results suggest that enhancing access to health care services in the rural areas and the sustainability of CHF would require building appropriate forms of social capital at individual and community levels. Specifically, CHF may increase enrolment through the existing social organisations and associations. Similarly, CHFs may well increase their membership if the avenues for trust building are created and nurtured.

JEL Classifications: I1, I3

Keywords: social capital, willingness to pay, community based health insurance

To Cite this Article: Tundui, C., & Macha, R. (2014). Social capital and willingness to pay for community based health insurance: Empirical evidence from rural Tanzania. Journal of Finance and Economics, 2(4), 50-67.

Copyright © Charles Tundui & Raphael Macha

Creative Commons License
This article is published under license to Science and Education Centre of North America. This is an Open Access article distributed under the terms of the Creative Commons Attribution 4.0 International License.

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Social Capital and Willingness to Pay for Community Based Health Insurance: Empirical Evidence from Rural Tanzania