Demand for Healthcare Services in Nigeria: A Multivariate Nested Logit Model

The object of this paper is to explain the healthcare decision process and the factors that influence medicare demand decisions of Nigerian households during a period of economic depression. It is based on a sample from a small-area analysis focusing on a relatively homogenous group. The objective of the study involved the estimation of the parameters of the demand for healthcare services in order to understand the nature of healthcare choices and the pathways to those choices that Nigerian households make under dire economic circumstances. These demand parameter estimates are considered valuable inputs into healthcare policy. Yet, to date, there is no sufficient information on the vital factors that shape households' utilization of medicare services nor is there sufficient information on the relative importance of healthcare alternatives available to them. This is the knowledge gap that this study hopes to fill. The nested logit model was found to be an appropriate functional form for the analysis.