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Price Elasticity of Demand for Reproductive Health Services at an Ecuadorian Private Voluntary Organization: Final Report

Financial sustainability is becoming a priority among family planning and reproductive health (FP/RH) service providers in the developing world. Nongovernmental organizations (NGOs), especially, need to recover program costs, often by charging user fees for services once offered at no charge or at heavily subsidized prices. Reliance on user fees, however, is controversial. Program managers and donors alike are concerned that fees may reduce access to services, especially among poor women. Furthermore, in many programs, the number of clients is an indicator of success. Hence, declines in utilization resulting from price increases may be unacceptable to program managers. Because of these concerns, service delivery organizations need to be aware of the likely impacts of price changes on utilization, and the tradeoffs between improving sustainability and serving low-income clients. A key parameter informing these types of decisions is the sensitivity of demand to price changes — the price elasticity of demand (PED).