Revisit the one-time subsidies and long-run adoption of health products: Quasi-experimental evidence from providing free eyeglasses in rural China

Promoting the adoption of health goods and services, especially in developing countries with low utilization rates, is crucial. Governments and non-governmental organizations often provide free or highly subsidized healthcare services and products. However, the long-term effects of these subsidies on the adoption of high-return technologies or products remain debated. This study, centered on children's vision care, investigates whether one-time subsidies for eyeglasses influence families' long-term private investment in purchased eyeglasses. The quasi-experiment was conducted in rural Shaanxi province, Northwest China, between January 2017 and December 2019 and involved 2,936 students from two county-level vision centers. The participants were divided into a treatment group receiving free eyeglasses (voucher group) and a control group receiving only prescription information (prescription group). Results demonstrate that providing a one-time subsidy significantly increased subsequent out-of-pocket purchases of vision health services. Notably, the fully subsidized group exhibited a 20-percentage-point higher rate of out-of-pocket eyeglass purchases compared to the control group once the subsidy was no longer provided. These positive impacts can be attributed to learning and peer effects arising from the subsidization phase. This study underscores the overall value of subsidies in boosting the uptake of underutilized health services, both in the short term and, more importantly, in the long term. Moreover, it suggests broader implications for promoting the adoption of various health products beyond vision care.