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Self-selection into healthcare options biases estimates of the effects of healthcare on health outcomes. The authors exploit exogenous variation in the cost of formal-sector care to show that the use of such care improves short-term health outcomes for acutely ill children in Tanzania. Better treatment-specific information, rather than greater access to medicines, appears to be the primary mechanism for this effect: children who use formal-sector care are as a result more likely to get timely treatment and adhere to their medications.
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