Applied Economics, 2007, 39, 415426

Prenatal care and birthweight production: evidence from South America

R. Todd Jewell
Department of Economics, University of North Texas, Denton, Texas, USA E-mail: tjewell@unt.edu

Research using US data has shown that increases in prenatal care have positive effects on birthweight and that the existence of unobserved health heterogeneity tends to reduce the measured effect of prenatal care. This study extends extant research to the South American countries of Bolivia, Brazil, Columbia and Peru using data from the demographic and health surveys, finding a positive effect of increased prenatal care use on birthweight. Furthermore, the largest marginal effect of increased prenatal care use is found at low levels of usage. The results highlight both the usefulness of existing methodologies for estimating the effect of prenatal care on birthweight and the importance of extending these methodologies to data from countries other than the USA.

I. Introduction This article presents an analysis of the effect of prenatal care on birthweight in four South American countries: Bolivia, Brazil, Columbia and Peru. Most extant research on birthweight and prenatal care has been done using US data. Extending existing research to South American countries is valuable due to the fact that US results are not easily generalized. First, South American countries have cultural and racial heritages that differ substantially from the USA. There are well-documented differences in birthweights by race, ethnicity and geographic origin (Kleinman and Kessel, 1987). These differences remain even after controlling for economic, social, demographic and institutional factors, implying that measures of race and ethnicity contain information about unobservable factors that affect birthweights, such as genetics, culture, or life experiences (Frisbie
1

et al., 1996). Second, South American countries differ from the USA in the rate of prenatal care usage; generally, US women use prenatal care more than South American women. For example, 98.9% of pregnant US women received some form of prenatal care in 2000, while only 60, 40, 90.8 and 83.8% of pregnant women in Bolivia, Brazil, Columbia and Peru, respectively, received any prenatal care. Third, income levels are highly correlated with birthweight (Cramer, 1995) and the USA has a significantly different income distribution than South American countries. For instance, 2003 per capita GDP was $37 800 in the US, while it was $2400 in Bolivia, $7600 in Brazil, $6300 in Columbia and $5200 in Peru.1 Finally, research using US data suggests that prenatal care has a small impact on birthweight, especially relative to other socioeconomic factors. Given these differences, the effect of prenatal care on birthweight may be substantially

Prenatal care averages are collected from Centro Latinoamericano de Perinatologia (www.paho.org/clap) and Income averages are collected from the CIAs 2004 World Factbook (www.cia.gov/cia/publications/factbook).
Applied Economics ISSN 00036846 print/ISSN 14664283 online 2007 Taylor & Francis http://www.tandf.co.uk/journals DOI: 10.1080/00036840500439028 415

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different in South America and the US. Specifically, since South American countries have much lower average incomes and lower rates of prenatal care usage, an increase in the use of prenatal care among South American women may lead to larger positive effects on birthweight than in the US. Empirical studies have indicated that expanded use of prenatal medical care leads to increases in birthweight, a commonly used proxy for infant health (McCormick, 1985; Institute of Medicine, 1986). Unfortunately, estimating the relationship between birthweight and prenatal care is problematic, since measures of prenatal care use are endogenous if there are unobservable factors that determine the mothers prenatal care behaviour as well as the infants birthweight. For instance, women with inferior health endowments, the exogenous health component unobservable to the researcher, may expect problematic pregnancies (e.g. lower birthweight) and thereby seek more prenatal care. In this case, neglecting endogeneity may either underestimate any positive impact of prenatal care or indicate that additional prenatal care actually reduces birthweight. Alternatively, women who have more prenatal care visits may also practice other forms of healthy behaviour that raise birthweight. Thus, failing to account for the endogeneity of prenatal care use could overstate the benefits of prenatal care. Rosenzweig and Schultz (1982, 1983, 1988) are the first to estimate the effect of prenatal care on birthweight with two-stage least squares (2SLS) to account for the effect of unobserved health heterogeneity on usage of health inputs, e.g. prenatal care.2 Using US individual-level data, the authors find that delaying the onset of prenatal care reduces birthweight. In addition, they find that OLS underestimates the effect of delaying prenatal care on birthweight by as much as 40 times their 2SLS estimates. The authors find evidence of adverse selection in prenatal care; namely, unhealthy women initiate prenatal care earlier and their babies are of lower birthweight. Grossman and Joyce (1990) use a sample of births in New York city to find that
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earlier initiation of prenatal care leads to higher birthweight, but this effect is only significant for black women. In addition, 2SLS estimates treating prenatal care as endogenous lead to larger estimates of the effect of prenatal care on birthweight. Employing a methodology similar to that of Grossman and Joyce, Liu (1998) analyses the effect of prenatal care on birthweight outcomes using data from the US state of Virginia. Measuring prenatal care usage as the number of months care is delayed, the author finds that the measured effectiveness of prenatal care is biased downward by the endogeneity of prenatal care. Recent articles have taken different approaches to estimating the relationship between prenatal care and birthweight. Li and Poirer (2003a,b) use Bayesian techniques and find that controlling for endogeneity leads to larger estimates of the effect of inputs (including prenatal care) on several birth outcomes (including birthweight). Using a full-information, semi-parametric estimation technique, Rous et al. (2003) show that even though controlling for unobserved health heterogeneity leads to larger estimates, the effect of prenatal care on birthweight is relatively small, especially when compared to behavioural factors outside the control of policymakers.3 Evans and Lien (2005), using a quasi-experimental methodology, find that prenatal care visits lost early in pregnancy are more costly in terms of lowered birthweight than visits lost late in a pregnancy. As is the case with most other work on the relationship between prenatal care and birthweight, data used in these recent articles is from the US; Li and Poirer (2003a,b) use the US National longitudinal survey and Youth, Rous et al. (2003) employ data from the US state of Texas and Evans and Lien (2005) use data from the US state of Pennsylvania. Although the relevance of the relationship between prenatal care usage and infant health is not confined to the US, relatively few studies exist that analyse this connection using data from developing countries. Guilkey et al. (1989) find that Philippine women with

Permutt and Hebel (1989) estimate the effect of smoking on birthweight using a simultaneous equations framework. The authors note that up to that point, models incorporating endogenous variables were utilized extensively by econometricians, but had received little attention in the biostatistical literature and had not been applied to studies of this kind (pp. 619620). Li and Poirier (2003b) report that the vast majority of biomedical literature on birthweight uses single-equation models and ignores endogeneity issues, with the work of Permutt and Hebel being the lone exception. Thus, it appears that the biomedical literature has continued to largely ignore the issue of endogeneity in birthweight studies. Given the wealth of evidence with respect to health heterogeneity and given the existence of relatively easy-to-use corrections for endogenous variables, the lack of studies in the biomedical literature is puzzling. Poirier (1998) concludes that a fundamental difference exists in the two literatures: economists view a mothers behaviour during pregnancy as endogenous to birth outcomes, while biomedical researchers do not. 3 These findings reinforce the results of Warner (1995), who suggests that the effect of prenatal care is too small to be an effective tool in reducing unfavorable birth outcomes since these outcomes are driven by inferior health endowments and the behaviour of mothers.

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more prenatal care visits generally have higherbirthweight babies, but this conclusion is not consistent across provider type. Panis and Lillard (1994) show that increases in prenatal care use results in higher infant survival rates in Malaysia. Using data from India, Maitra (2004) finds that increased use of prenatal care reduces the probability of child mortality. Interestingly, all of these studies also indicate that unobserved heterogeneity tends to decrease the measured effect of prenatal care, which is similar to findings using US data. The present study employs two measures of prenatal care: month of prenatal care initiation and number of prenatal care visits. The results from this study indicate that, like US-based studies, ignoring the endogeneity of prenatal care negatively biases the measured effect of prenatal care on birthweight, irrespective of the measure of prenatal care employed in the estimation. The results give evidence that the marginal effect of prenatal care in South America may be larger than in the US. In addition, differences are found in the effects of prenatal care use by South American country. The estimation technique also enables the simulation of the entire birthweight production function, allowing for an analysis of the effect of prenatal care on birthweight over the entire range of the input.

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information for the 5 years prior to the survey, the data are a combined sample of births for the decade of the 1990s. This study looks at the birthweight of the most-recent birth for each woman in the sample; thus, although data exist on several births for some women, each woman will be counted in the sample only once. After eliminating observations with missing data and women of extreme ages, the final data set consists of 2902, 3093, 2591 and 7244 most-recent births for women from Bolivia, Brazil, Columbia and Peru, respectively.4 DHS data have been used extensively by demographers (Palloni and Rafalimanana, 1999; Ali et al., 2003) and are recently coming into more-common use by economists (Dow et al., 1999), even though some researchers avoid the use of retrospective survey data. For some researchers, the major problem with DHS data is the lack of information on prices. In addition, there are no measures of income; however, DHS data contain a measure of wealth, which can also be used across countries. The wealth variable is computed using Filmer and Pritchetts (1999) principle components analysis that combines household asset characteristics into a single measure of long-term household economic status relative to other households in the same country. In order to make the wealth variable comparable across countries, the values for each country are standardized, so that the mean of the wealth distribution is zero and the standard deviation is one. An advantage of DHS data is that birthweight is given even if the most-recent birth was not a live birth. Thus, the researcher can resolve the potential selection bias that occurs when using a sample of only live births. However, there are significant problems associated with using DHS data to analyse birthweight outcomes. DHS data include no measures of gestation; thus, the researcher cannot investigate the connection between health inputs and gestation (Rosenzweig and Schultz, 1982, 1983) and the researcher cannot construct measures of prenatal care adequacy. In addition, smoking has been shown to affect birthweight (Permutt and Hebel, 1989) and race appears to be correlated with birthweight (Kleinman and Kessel, 1987), but data on smoking prevalence and race are unavailable or inconsistently measured in most of the DHS surveys from South America. DHS data contain several possible measures of a womans use of prenatal medical care. The most

II. Data The demographic and health surveys (DHS) are household surveys conducted by ORC Macro International with funding from the US Agency for International Development. The surveys are nationwide, random samples that focus on the reproductive and health behaviour of women ages 15 49 years. DHS data have the advantage of being one of the only sources of comprehensive data on womens and childrens health in developing countries. Since DHS data are gathered under the supervision of the same organization and since a common questionnaire is used to gather the data, these surveys are more easily combined than less-coordinated survey data, giving the researcher the opportunity to compare outcomes across countries. The data utilized in this study are from surveys of four South American countries in three different years: Peru, 2000; Columbia, 2000; Bolivia, 1998; and Brazil, 1996. Since each survey provides retrospective

4 Research has shown that pregnancies to extremely young and extremely old women involve substantially higher risk of complications (Abel et al., 2002). Due to the differences between women of normal reproductive age and those who are either younger or older, this study concentrates on women between the ages of 15 and 39.

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common measure of prenatal care usage in the literature is the month or trimester of prenatal care initiation. However, month of initiation is only a part of overall prenatal care usage. Kotelchuck (1994) discusses two aspects of prenatal care: (1) month of initiation and (2) percent of recommended visits received. This study uses both month of initiation and number of visits as two distinct measures of prenatal care. The month of initiation varies from 1, implying prenatal care initiation in the first month of pregnancy, to 10, implying prenatal care was never initiated. The number of prenatal care visits varies from 0 to 40, with the vast majority of observations falling between 0 and 12 (96.6%). It is tempting to delete the positive outliers, since their presence might bias the estimation. However, deleting these observations would certainly bias the estimates, since the sample would then be truncated from above. To deal with this issue, prenatal care visits are measured as the decile of the sample distribution of prenatal care visits in which a mothers visits falls. The content of each decile is detailed in Appendix A. Estimates of the model developed in Section III are produced and compared using the two different measures.5

R. T. Jewell
reduced-form demand equations for Z and M, each of which is a function of prices and income and a reduced-form demand equation for C, which is a function of income, prices and c. Let I exogenous income and P a vector of exogenous prices. The demand function for C is the following: C Dc P, I, c 2

III. Methodology In the spirit of Rosenzweig and Schultz (1983) and Grossman and Joyce (1990), assume that each pregnant woman maximizes a utility function defined over infant health (H) and other consumption goods (a vector Z ) subject to a budget constraint. H is produced via a production technology (F ) that is a function of prenatal care use (C ), other health inputs (a vector M ) and unobserved health heterogeneity (mc). H FC, M, c 1

Note that both H and C are affected by c. The unobservable nature of c implies that it will become part of the error term for both equations, leading to an error term correlation across Equations 1 and 2. Therefore, estimating the infant health production function of Equation 1 without accounting for unobserved heterogeneity will lead to biased estimates of the effect of prenatal care on infant health. The magnitude and the direction of the bias will be determined by the correlation of unobservable heterogeneity across equations. This article estimates Equations 1 and 2 using 2SLS to control for the effect of c on both infant health and prenatal care use. As shown by Grossman and Joyce (1990) and Liu (1998) sample selection also leads to estimation bias. The sample of pregnant women who choose to give birth is not random because the same unobserved heterogeneity that affects prenatal care usage may also have an effect on a womans decision to become pregnant and give birth. With US data, studies can control for the decision to give birth using information on the abortion decision, while the decision to become pregnant is normally ignored due to data or methodological constraints. However, DHS data do not record when a pregnancy is terminated in abortion. In addition, similar data constraints make it impossible (or at least infeasible) to control for sample selection associated with the decision to become pregnant. Thus, the results from this study are conditional on a birth occurring. Birthweight production function The general form of the infant health production function is given in Equation 3: BW Hcare, education, BMI, parity, age 3

In order to concentrate on the effect of prenatal care on infant health, assume that unobserved heterogeneity in infant health production only impacts the use of prenatal care and is independent of the other inputs M.6 Utility maximization leads to a system of

5 Kotelchucks index of prenatal care adequacy could also be employed as a measure of prenatal care and such an index would allow the researcher to include information on visits and month of initiation simultaneously. However, there are two problems. As stated above, no measure of gestation is available in the DHS data; since Kotelchucks index utilizes gestation to measure recommended visits, computing the index is problematic. More importantly, the 2SLS model is inappropriate for use with this dependent variable, since treating a variable consisting of only three categories as linear is inappropriate. Nonetheless, it is technically possible to produce results for the 2SLS model using the adequacy index by assuming that all gestation periods are 40 weeks and ignoring the nonlinearity of the index. These results (available upon request) follow the same pattern as those reported in this article. 6 Among the articles surveyed in the introduction, only Rosenzweig and Schultz (1982, 1983, 1988) assume that unobserved heterogeneity impacts more than just prenatal care use.

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where BW refers to birthweight and H is the production technology. Care measures prenatal care use. As previously discussed, prenatal care will be measured as either month of initiation or number of visits. Education is the mothers years of formal education. Education is included in studies of health production because it is assumed that increases in education lead to increases in productive efficiency (Grossman, 1972). In the case of birthweight, a moreeducated mother has the ability to produce infant health more efficiently, perhaps due to a better understanding of the relationship between health inputs and birthweight. BMI is the mothers body mass index. BMI is an indirect measure of maternal health and should positively impact birthweight (Ehrenberg et al., 2003). Parity indicates the mothers number of births and should measure the effect of maternal experience on birthweight. Under the assumption that women with more pregnancy and birthing experience are able to produce infant health more efficiently, Parity should have a positive effect on birthweight. In addition, previous birth experience has been linked to anatomical changes that may impact the efficiency of birthweight production (Khong et al., 2003). Age is the mothers age at the time of the birth. Past research has shown a clear relationship between age and birthweight, with both younger and older mothers having higher rates of low birthweight babies than other women (Abel et al., 2002). DHS data also include other variables that impact birthweight. For example, multiple-birth children weigh less than singleton-birth children (Blondel et al., 2002). Also, female babies normally weigh less than male babies (Thomas et al., 2000). However, neither multiple birth nor gender is an input in the birthweight production process since they are out of the control of the mothers. Since multiple births and gender are not inputs but will impact birthweight, these measures are treated as exogenous shift parameters in birthweight production. There may be differences in birthweights across South American countries, possibly due to differences in race, ethnicity, or culture. In order to test for such an effect, dummy variables for each country are included as shift

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parameters in birthweight production. When the shift parameters are included in the birthweight production function, Equation 3 becomes the following: BW Hcare, education, BMI, parity, age, country, multiple, female 4

where country is a series of dummy variables indicating the mothers country of residence (excluded category Peru), multiple equals one for multiple births and female equals one if the childs gender is female. The functional form used to estimate the productive relationship given in Equation 4 is the generalized Leontief (Diewert, 1971), a flexible functional form that is a local second-order approximation to the birthweight production function. The generalized Leontief form used in this study is listed in Equation 5.7 XX BW  Country ij y1=2 y1=2 j i X
i
i j

i y1=2 i

Multiple Female "

The dependent variable is the birthweight of each infant in grams and the yi are explanatory variables: care, education, BMI, parity and age. , i, , ,  and ij represent a set of regression parameters to be estimated and " is the error term. Summary statistics for variables included in Equation 5 are listed in Table 1. Prenatal care demand Equation 6 models the amount of prenatal care the woman obtains. Thus, Equation 6 is a reduced-form demand equation for prenatal care and is specified as: X bi xi e 6 Care a
i

where the dependent variable is a measure of prenatal care that each mother obtains, xi is a vector of explanatory variables, a and bi represent a set of regression parameters to be estimated and e is the error term.8 Since Equation 6 is a reduced-form

7 Other flexible functional forms are available (e.g. the translog). The generalized Leontief is chosen for this application due its ability to accept interaction terms among indicator variables; the translog, for example, cannot be estimated with such interactions since the log of zero is undefined. The generalized Leontief is used by Rosenzweig and Schultz (1982). 8 A linear form is chosen for prenatal care demand; however, other forms do not substantially change the results, especially with respect to the second-stage results.

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Table 1. Summary statistics N ^ 15 830 Variable Birthweight Decile of prenatal care visits Month of initiation of prenatal care Bolivia Brazil Columbia Peru BMI Parity Age Education Multiple Female Mean 3258.422 5.028 3.581 0.183 0.195 0.163 0.458 25.136 1.804 26.918 7.788 0.008 0.489 SD 625.774 2.661 2.630 0.387 0.396 0.370 0.498 4.093 2.139 6.651 4.248 0.091 0.500

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and rural areas, since availability will vary over geographic area and there is normally less medical care available in rural areas (Probst et al., 2004). Also discussed previously, income is not directly measured in the DHS data. However, several indirect measures of income are available. Filmer and Pritchetts (1999) household wealth measure will be utilized to indicate permanent income. The DHS data also include indicators of a womans employment status and her job category if employed (excluded category mother unemployed); these variables can be used to indicate current income. In addition, married women (excluded category unmarried) may have access to sources of income or other financial support that differ from those of unmarried women. A final exclusion restriction is associated with the wantedness of the child, which may signal the mothers desire to invest more in the health of her child (Joyce and Grossman, 1990) and will impact prenatal care demand.

demand equation for prenatal care, the vector xi contains the information included in Equation 5: mothers age, education, previous births and body mass index, as well as dummy variables for country of residence, multiple birth and childs gender.9 Equation 6 must be identified separately from Equation 5. In the present case, it is necessary to find an exclusion restriction, i.e. a variable that impacts prenatal care use but will not be an argument in the birthweight production function. Using the difference between Equations 1 and 2 as a theoretical guideline, prices and income are orthogonal to the infant health production function and could serve as exclusion restrictions. As discussed previously, the DHS data do not contain direct measures of prices. Most importantly, the DHS data do not record the price of prenatal care, which creates an omitted variables problem when estimating the demand for prenatal care. Interestingly, the lack of prenatal care price data is a problem faced by many studies, even those that use US data. A common solution is to use the availability of prenatal care health services, which measures variations in the transportation cost component of the total price and variations in price associated with supply adjustments. In the current study, rural (excluded category urban residence) will capture the effect of price differences among urban
9

IV. Results The birthweight production function given in Equation 5 and the prenatal care demand equation given in Equation 6 can be estimated using 2SLS. 2SLS is a limited-information, instrumental variables estimation method that can be used when the researcher has multiple identifying restrictions. In the first stage, Equation 6 is estimated using OLS and predicted values of prenatal care are calculated from the regression results. These predicted values are purged of endogeneity bias. The second stage entails an OLS estimation of Equation 5 in which care is measured using the predicted values from the firststage estimation. The results from 2SLS estimations of Equation 5 are reported below and compared to the results from an OLS estimation of Equation 5 not controlling for endogeneity. Results from the first-stage estimates of Equation 6 are given in Appendix B.10

Yearly dummies are also included in Equations 5 and 6 in order to control for effects that are constant across countries and individuals but vary with time. For brevity, the coefficients on these yearly dummies are suppressed in all tables in this article and are available from the author. 10 As required for identification, the exclusion restrictions are jointly significant when estimating demand using either visits or month. Further evidence of the appropriateness of the exclusion restrictions involves the testing of over-identifying restrictions by comparing the estimates of the structural form of Equation 5 to the estimates of a reduced-form infant health production function including the predicted value of prenatal care from the first-stage estimation of Equation 6 and all but one of the exclusion restrictions. Under the null hypothesis of valid exclusion restrictions, the structural- and reduced-forms of Equation 5 will not be statistically different. Testing the null hypothesis involves an F-test on the additional variables. Using visits and month, the F-statistics are 0.12 and 0.25 respectively and we cannot reject the null at any conventional statistical level. Thus, the exclusion restrictions have statistical support in addition to the theoretical support aforediscussed.

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Table 2. Birthweight production function N 15 830 Decile of visits OLS Care Care1/2 Bolivia Brazil Columbia BMI BMI1/2 (Care * BMI)1/2 (BMI * Parity)1/2 (BMI * Age)1/2 (BMI * Education)1/2 Parity Parity1/2 (Care * Parity)1/2 (Parity * Age)1/2 (Parity * Education)1/2 Age Age1/2 (Care * Age)1/2 (Age * Education)1/2 Education Education1/2 (Care * Education)1/2 Multiple Female Constant Adjusted R-squared Care F-test (6,15795) BMI F-test (6,15792) Parity F-test (6,15792) Age F-test (6,15792) Education F-test (6,15792) 19.37 138.81 177.43*** 121.04*** 78.35*** 43.07** 636.41*** 33.88 26.21 19.98 9.88 21.99* 114.24 42.09*** 22.49 23.90** 43.04** 328.39* 34.59* 38.22*** 4.73 197.10** 20.82** 767.42*** 112.54*** 258.92 0.067 17.35*** 56.41*** 11.48*** 3.72*** 7.80*** (13.19) (124.25) (15.54) (22.22) (14.29) (19.89) (214.24) (21.14) (21.45) (26.79) (15.86) (11.52) (125.65) (14.40) (20.43) (10.77) (17.25) (186.94) (18.33) (13.10) (5.10) (90.43) (10.22) (53.11) (9.62) (767.45) 2SLS 76.25 395.77 195.62*** 110.74*** 69.27*** 53.35*** 576.01*** 114.63 53.58** 10.20 29.78 1.25 257.50 30.87 3.63 5.53 32.05 504.67*** 51.80 16.80 4.01 279.95** 23.79 776.28*** 112.00*** 86.01 0.063 6.71*** 47.25*** 11.51*** 4.22*** 1.54 (99.02) (776.94) (16.21) (22.78) (14.65) (20.37) (216.98) (72.66) (24.88) (30.11) (19.65) (14.74) (138.76) (54.76) (54.76) (14.05) (19.82) (197.71) (68.53) (17.65) (7.37) (114.97) (45.55) (53.31) (9.64) (824.05) Month of initiation OLS 26.54** 51.00 170.12*** 126.91*** 81.21*** 45.01** 612.02*** 5.93 31.93 13.83 13.38 20.56* 209.77 19.04 14.14 14.87 37.87** 378.63* 3.64 28.58** 8.89* 218.79** 5.60 763.08*** 112.11*** 451.51 0.063 4.82*** 58.16*** 8.51*** 2.39** 10.37*** 2SLS

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(11.66) 232.89** (104.32) (138.78) 1104.52 (817.49) (15.54) 172.07*** (15.54) (22.28) 106.70*** (23.00) (14.34) 53.23*** (16.10) (19.92) 46.86** (19.94) (224.18) 905.31*** (318.72) (20.97) 77.12 (68.72) (21.38) 48.98* (25.21) (26.81) 9.72 (31.27) (15.76) 24.13 (18.65) (11.50) 15.42 (16.00) (134.02) 77.33 (248.74) (14.18) 31.16 (55.69) (20.27) 13.28 (27.21) (10.71) 3.53 (13.69) (17.17) 28.25 (21.13) (196.90) 351.61 (337.09) (17.99) 5.27 (71.48) (12.99) 18.15 (17.30) (5.03) 2.58 (7.04) (94.41) 263.47 (188.48) (9.61) 20.88 (46.87) (53.24) 760.11*** (53.20) (9.64) 110.95*** (9.64) (313.30) 1,618.99 (1,946.00) 0.064 7.48*** 52.06*** 10.56*** 2.96*** 1.89*

Notes: *Significant at 10% level. **Significant at 5% level. ***Significant at 1% level. SE in parentheses.

Birthweight production function estimates The results of an estimation of the production function of Equation 5 are given in Table 2. Since the production function is nonlinear and there are several interaction terms, the levels of significance and magnitude of the coefficients of individual variables are difficult to interpret directly from the table. Tests of joint significance for the input variables are included at the bottom of the table. When the month of initiation is used to measure prenatal care, the OLS marginal effect at the sample means implies that waiting an extra month will reduce birthweight by only 7.6 g (0.3 ounces), while the 2SLS estimated marginal effect is 62.5 g (2.2 ounces), over 8 times the OLS estimate. Furthermore, when using the decile of prenatal care, the OLS estimated

marginal effect of moving to a higher decile (or moving from the average of 6 to 7 prenatal care visits) is 14 g (0.5 ounces) and the 2SLS marginal effect is 50.7 g (1.8 ounces). Clearly, OLS underestimates the impact of prenatal care on birthweight outcomes in South America, a result found in studies using data from the US. However, given a sample average birthweight of 3258 g (7 pounds, 2 ounces), even the 2SLS estimates show a relatively small effect of increased prenatal care usage. The results from this study can be compared to studies using US data. For the most part, the effect of prenatal care in producing birthweight in South America appears to be as large as or larger than in the US. Rosenzweig and Schultz (1982), using the same functional forms and methodology as in this study, find that waiting an extra month to initiate

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prenatal care lowers birthweight by 45 g. Using a similar estimation methodology but different functional forms, Grossman and Joyce (1990) find that a one month delay of prenatal care initiation reduces birthweight by 23 g for White mothers and by 37 g for Black mothers, although the coefficient for Whites is insignificant. Using Grossman and Joyces methodology, Liu (1998) finds that later initiation of prenatal care reduces birthweight by approximately 70 g and that the effect is largest for Black mothers. Using a methodology similar to Grossman and Joyce and Liu, Rous et al. (2004) find that an additional prenatal care visit increases birthweight by only 14 g. Assuming that the 2SLS estimates are more appropriate, an analysis of the other coefficients brings some interesting results to light. The coefficients from the estimations using either visits or month are similar in magnitude and significance, with the obvious exception of the prenatal care coefficients. Of particular interest are the coefficients on the dummy variables measuring country: as compared to Peru, the countries in this study have significantly higher birthweights. As an example, children born in Brazil are approximately 110 g heavier than children born in Peru, all else constant. Based on the average birthweight of 3258 g, Brazilian babies are over 3% heavier than Peruvian babies. The difference between Bolivian and Peruvian birthweights is even larger; Bolivian babies are between 5 and 6% heavier than Peruvian babies. These differences may be due to differences in the quality of prenatal care, or they may simply reflect genetic or cultural diversity. As shown by the F-test reported at the bottom of Table 2, prenatal care (as measured by either visits or month of initiation) is jointly significant, although none of the coefficients on the interactions with other inputs are individually significant. The implication is that prenatal care does not interact with other inputs to have a significant effect on birthweight in South America. This result is somewhat surprising since significant interaction effects are often found by researchers using US data (e.g. Rosenzweig and Schultz, 1982, 1983). This finding does, however, highlight one of the differences between birthweight production in the US and South America. There is only one significant input interaction effect: women with higher body mass indexes and more previous births deliver heavier babies. As expected, children who are part of a multiple birth and female infants are lighter than others. The production function approach allows for a test of different effects of prenatal care on birthweight across countries, since the generalized Leontief

R. T. Jewell
production function can be modified to include interactions between prenatal care and country. Table 3 shows the results including care country interactions for OLS and 2SLS estimations. An F-test indicates that these interactions are jointly significant; thus, the interactions should be included in the estimation. Relative to the excluded interaction care Peru, Columbian mothers who have more prenatal care visits have lower-birthweight babies. In addition, Bolivian mothers who initiate prenatal care later have higher-birthweight babies. In addition, the inclusion of country interactions in Table 3 leads to a marginally significant interaction between prenatal care visits and body mass index, with heavier mothers benefiting more than others from additional visits. Simulated birthweight production functions As is the case with the results reported in Table 2, the results in Table 3 are difficult to interpret with respect to the magnitude of the effect of prenatal care on birthweight. One could estimate the marginal effect at the sample means as reported above for Table 2, but this gives only a partial picture. Instead, one could use the results to simulate the entire production function for birthweight as a function of prenatal care. A simulated birthweight production function is produced by predicting birthweight for each child in the sample at each different level of prenatal care and then taking the sample average birthweight over each level of prenatal care. For example, to simulate birthweight production as a function of month of initiation, the researcher assigns each mother an initiation month of one, computes the predicted birthweight for each child based on the coefficients reported in Table 3 and averages birthweight over the entire sample. This step is done for each initiation month to establish a picture of how varying the month of initiation will affect birthweight for the entire sample of South American births. Figure 1 shows the simulated birthweight production function with prenatal care measured as decile of visits, while Fig. 2 shows the same function with prenatal care measured by month of initiation. Both figures include the averages computed from the raw data and the simulated birthweight production functions from 2SLS and OLS estimations reported in Table 3. A comparison of the entire OLS and 2SLS simulated birthweight production functions indicates that OLS underestimates the range of the impact of prenatal care on birthweight. As shown in Fig. 1, OLS simulations result in an increase in average birthweight from 3153 to 3314 g as prenatal care

Prenatal care and birthweight production

Table 3. Birthweight production function including country/care interactions N ^ 15 830 Decile of visits OLS Care Care1/2 Bolivia (Care * Bolivia)1/2 Brazil (Care * Brazil)1/2 Columbia (Care * Columbia)1/2 BMI BMI1/2 (Care * BMI)1/2 (BMI * Parity)1/2 (BMI * Age)1/2 (BMI * Education)1/2 Parity Parity1/2 (Care * Parity)1/2 (Parity * Age)1/2 (Parity * Education)1/2 Age Age1/2 (Care * Age)1/2 (Age * Education)1/2 Education Education1/2 (Care * Education)1/2 Multiple Female Constant adjusted R-squared Care F-test (9,15 792) BMI F-test (6,15 792) Parity F-test (6,15 792) Age F-test (6,15 792) Education F-test (6,15 792) (Care * Country)1/2 F-test (3,15 792) Notes: *Significant at 10% level. **Significant at 5% level. ***Significant at 1% level. 17.29 225.72* 338.12*** 79.19*** 292.82*** 81.47*** 246.73*** 77.01 43.08** 655.38*** 39.59* 26.79 18.53 10.70 21.91* 118.03 44.34*** 22.85 25.08** 4.38*** 355.55* 34.07* 39.31*** 5.18 221.65** 12.04 768.23*** 113.11*** 531.66 0.069 14.53*** 55.43*** 11.54*** 3.75*** 7.52*** 8.86*** 2SLS (13.27) 99.15 (125.59) 246.68 (44.25) 942.80*** (20.70) 349.41*** (51.64) 672.29*** (21.52) 254.73*** (54.85) 798.90 (23.77) 321.64*** (19.87) 55.80*** (214.19) 637.20*** (21.23) 120.66* (21.44) 55.01** (26.77) 18.37 (15.85) 35.89* (11.51) 0.93 (125.59) 233.14* (14.48) 5.27 (20.41) 4.32 (10.77) 8.75 (17.24) 36.02* (186.88) 489.15** (18.32) 2.21 (13.10) 22.71 (5.09) 3.99 (90.75) 304.58*** (10.46) 8.89 (53.08) 777.07*** (9.62) 112.09*** (769.46) 1,093.915 0.068 13.34*** 44.48*** 11.24*** 3.34*** 1.68 26.52*** (110.12) (445.09) (106.78) (49.92) (114.84) (50.41) (124.26) (53.91) (20.33) (217.87) (72.89) (24.82) (30.05) (19.62) (14.72) (138.55) (54.80) (25.23) (14.04) (19.78) (197.82) (68.69) (17.68) (7.36) (118.00) (46.42) (53.19) (9.62) (831.19) Month of initiation OLS 22.55* 11.47 121.48*** 26.08*** 67.10 32.81 10.75 53.75** 45.59** 613.88*** 8.28 32.68 13.52 13.40 20.58* 217.65 20.68 14.05 15.28 38.36** 386.63** 2.60 29.34** 8.91* 215.56** 1.98 764.42*** 112.39*** 77.69 0.063 3.91*** 57.81*** 8.40*** 2.45** 10.31*** 2.08* (11.79) (142.47) (40.58) (20.12) (44.80) (21.91) (26.40) (23.85) (19.92) (224.16) (21.10) (21.38) (26.81) (15.77) (11.49) (134.08) (14.26) (20.17) (10.72) (17.17) (196.91) (18.01) (13.00) (5.04) (282.02) (9.86) (53.24) (9.64) (847.64) 2SLS 81.42 55.77 431.73*** 309.50*** 332.21*** 226.38*** 446.54*** 271.02 47.66** 895.23*** 59.19 48.88** 12.46 26.47 10.18 86.74 40.23 7.03 5.51 31.54 357.55 29.97 22.20 4.63 189.18 26.82 762.46*** 110.75*** 350.87 0.067 11.68*** 49.70*** 11.05*** 3.48*** 2.13** 20.02***

423

(115.17) (869.81) (94.19) (47.51) (99.49) (51.54) (97.57) (33.16) (19.91) (318.17) (68.85) (25.17) (31.22) (18.63) (16.01) (248.30) (55.61) (27.17) (13.67) (21.10) (336.64) (71.87) (17.29) (7.03) (189.53) (48.62) (53.12) (9.62) (1975.43)

varies from the lowest to highest decile of visits. In contrast, 2SLS simulations result in an increase in average birthweight from 2869 to 3367 g over the same range of visits. Figure 2 shows a similar pattern: as month of inititation changes from 1 to 10 months, OLS simulated birthweight decreases from 3275 to 3185 g, while 2SLS simulated birthweight shows a larger variation in average birthweight, from 3400 to 2864 g, over the same range of prenatal care initiation. A visual inspection of these figures reveals further insights with respect to the impact of health heterogeneity on birthweight production in South American. As shown in Tables 2 and 3, OLS

underestimates the marginal effect of prenatal care on birthweight in South America. However, the charts give evidence that OLS underestimates the marginal effect of prenatal care on birthweight over the entire range of the input, indicating that unobserved heterogeneity is characterized by adverse selection in prenatal care whether measured as visits or month of initiation. In addition, endogeneity bias appears largest at lower rates of prenatal care use. Specifically, Fig. 1 shows that OLS seriously underestimates the marginal positive effect of prenatal care for visits less than the mean number of visits, but only slightly overestimates the marginal effect of visits past the mean. Also, Fig. 2 shows that OLS

424
3400

R. T. Jewell

3300

3200 Birthweight 2SLS OLS Raw

3100

3000

2900

2800 1 2 3 4 5 6 7 8 9 10 Prenatal care

Fig. 1.

Birthweight production function prenatal care ^ Decile of visits

3400

3300

3200 Birthweight 2SLS OLS Raw

3100

3000

2900

2800 1 2 3 4 5 6 7 Prenatal care 8 9 10

Fig. 2.

Birthweight production function prenatal care ^ Month of initiation

underestimates the marginal negative effect of delayed initiation and the difference between OLS and 2SLS marginal effects is largest for months of initiation greater than the mean. More importantly, the 2SLS marginal effect of prenatal care is largest at low visit deciles and late prenatal care initiation, implying that women who have the lowest use of prenatal care also have the greatest to gain from increasing their use of prenatal care.

V. Conclusion Existing research using US data has shown that increases in prenatal care have statistically significant, positive effects on birthweight. In addition, this research has shown that the existence of unobserved health heterogeneity tends to reduce the measured effect of prenatal care, necessitating an estimation methodology that controls for endogeneity. This study

Prenatal care and birthweight production

extends extant research on birthweight and prenatal care to South America. Similar to past studies, this study finds a significant effect of prenatal care on birthweight using two measures of prenatal care and controlling for prenatal care endogeneity. The results highlight both the usefulness of existing methodologies for estimating the effect of prenatal care on birthweight and the importance of extending these methodologies to data from countries other than the US. Using the estimated results, this article also presents simulated birthweight production functions. An interesting policy-related result is derived from the simulations. Biomedical research has established that birthweight is a strong indicator of infant health. The simulations in this article give evidence that OLS consistently underestimates the marginal effect of prenatal care and the largest underestimation occurs at low levels of birthweight use. Furthermore, the largest marginal effect of increased prenatal care use is found at low levels of usage. Therefore, children of women with the lowest use of prenatal care have the most to gain, in terms of increased birthweight, from increased prenatal care use. For South American policymakers, attempts to increase prenatal care use among the lowest users will lead to the largest increases in average birthweight and, therefore, lead to the largest increases in infant health and the largest reductions in problems associated with poor infant health.

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Appendix

A Details of prenatal care visits distribution N ^ 15 830 Decile of prenatal care visits Number of visits 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 26 27 30 32 36 37 38 40 (n 1489) (n 378) (n 624) (n 1140) (n 1491) (n 1648) (n 2135) (n 1962) (n 1658) (n 1589) (n 662) (n 126) (n 387) (n 80) (n 82) (n 184) (n 33) (n 9) (n 41) (n 6) (n 87) (n 1) (n 1) (n 1) (n 4) (n 2) (n 2) (n 1) (n 1) (n 6) Percent of sample 11.79 11.14 9.42 10.41 13.49 12.39 10.47 10.04 4.98 5.86

B Reduced-form prenatal care estimates N ^ 15 830 Decile of visits Bolivia Brazil Columbia BMI Parity Age Education Multiple Female Wealth Rural Married Child wanted later Child not wanted Professional Clerical Sales Self-employed agriculture Other agriculture Domestic Service Skilled manual Unskilled manual Job unknown Constant Adjusted R-squared 0.578*** 0.407*** 0.327*** 0.014*** 0.179*** 0.048*** 0.096*** 0.194 0.006 0.652*** 0.001 0.887*** 0.334*** 0.429*** 0.194** 0.482*** 0.024 0.138* 0.183 0.024 0.055 0.259** 0.145 0.391 2.512*** 0.236 (0.063) (0.087) (0.059) (0.005) (0.014) (0.004) (0.006) (0.204) (0.037) (0.028) (0.056) (0.072) (0.047) (0.050) (0.080) (0.100) (0.054) (0.072) (0.154) (0.093) (0.089) (0.116) (0.119) (0.407) (0.248) Month of initiation 0.047 0.532*** 0.731*** 0.001 0.202*** 0.051*** 0.074*** 0.087 0.028 0.511*** 0.045 1.051*** 0.314*** 0.382*** 0.108 0.376*** 0.008 0.059 0.064 0.039 0.034 0.141 0.147 0.435 6.190*** 0.172 (0.064) (0.090) (0.061) (0.005) (0.015) (0.004) (0.007) (0.210) (0.038) (0.029) (0.058) (0.074) (0.048) (0.051) (0.082) (0.102) (0.055) (0.074) (0.158) (0.095) (0.092) (0.120) (0.122) (0.419) (0.255)

Notes: *Significant at 10% level. **Significant at 5% level. ***Significant at 1% level. SE in parentheses.