| In this project, I assess how parents' investment in their young children is affected by their awareness of a particular micronutrient supplement, iodized salt, that prevents early brain damage. Iodine deficiency is described by the World Health Organization as "the world's most prevalent, yet easily preventable, cause of brain damage." A common reason for non-use of iodized salt in developing countries is simple unawareness of its existence. Unawareness of iodized salt has the potential to affect not only current iodized-salt use but also parents' choices of other current and future investments in a child. I develop a framework that allows predicting the short- and long-term net impact on child achievement of policies that make households aware of iodized salt, taking into account parents' behavioral responses. The methodology permits ex-ante policy predictions in addition to ex-post evaluation. Using rich longitudinal data from the Philippines, collected in the context of locally varying iodized-salt-awareness campaigns, I estimate (1) a production function for child achievement, capturing ceteris-paribus effects of iodized-salt-use, as well as other inputs of parent-child interaction and early education, and (2) dynamic input demands, relating parents' choice of each input to their awareness status and local demand conditions. The estimated direct biological impact of iodized-salt-use on achievement is large and highly significant. Estimates also suggest that unaware parents' investment in early education would increase significantly if they were made aware of iodized salt. Simulations using the estimates indicate that there are large potential short- and long-term gains to making unaware parents aware: in the Philippines data, children's achievement would increase by 13.3% of a standard deviation contemporaneously and by 15.1% of a standard deviation one year later. Ignoring the effect of iodized-salt awareness on investments other than iodized-salt-use substantially underpredicts the overall impact. Decomposing the impact suggests that gains are primarily in cognitive and fine-motor domains. |
