The relationship between location and early childhood health choices among urban residents of Bangladesh

The upward trends in both the quantity and relative proportions of slum residents in developing countries have led to international health concerns, including the impact of slum residency on health behaviors. Measurement of these impacts, however, requires recognizing that the unobservable household characteristics that affect the location decision may also affect health care choices and health outcomes. To address the potential bias resulting from this pattern of causality, this research models the decision to locate in a particular area and the household's demand for maternal and child health services simultaneously. It uses a unique urban data set from Bangladesh that incorporates sophisticated geographical mapping techniques to carefully delineate between slum and non-slum areas at a particular point in time. The estimation method allows for correlation across outcomes using a flexible, semi-parametric approach to the modeling of unobserved heterogeneity. The results suggest that accounting for the endogenous location decision of a family substantially reduces bias in estimated marginal effects of slum residence on preventive care demand. While community infrastructure variables appear correlated with preventive care demand, the causal effect of the availability of primary health care facilities is indistinguishable from zero when unobserved heterogeneity is taken into account. The research also incorporates endogenous fertility into the analysis in order to account for potential interactions between the quantity and quality of child health inputs. When accounting for fertility decisions, the results support the initial findings pertaining to community infrastructure but complicate the interpretation of the relationship between slum residence and investments in child health.