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  • Mathieu Provencher

Mobile Services to the rescue


(picture taken by Mathieu Provencher in Lima, Peru)

Hello everyone!

As most of you probably know, I currently live in Lima, Peru. This city, and indeed this country, has given me many different examples that can be used when teaching Economics. We can find a good array of behaviours here that I would not be able to easily find in my home country, Canada.

A person looking for strange and counter-intuitive economic choices does not have to go very far to find such things here. Although it is apparently part of human nature to see and remember bad things with more intensity than good ones, and believe me you don’t need a particularly good memory to remember bad things here, I want to focus on some things that make life much better.

In the “usual” development trajectory of a country, medical services tend to be very mobile in early phases of economic growth. That is mostly because services tend to be local for poorer communities and the local doctor or pharmacist (which can be the same person) doesn’t have a proper place to receive people. They just go around and see their patients when needed. Most people tend to be in the agricultural sector in poorer countries and they just can’t go at a clinic and wait for hours… farming is a fairly labour intensive activity for most of the world.

As a country develops, services tend to be more centralised and people need to go to the doctor as opposed to the doctor going to them. It also becomes much more expensive to dispatch doctors around as they tend to get better and better salaries. Having them all in one place improves efficiency because they don’t waste time going around and also because specific infrastructure (such as medical machines for examples) can be put in place to help them.

Other services such as the milkman, dentists, and city administration also tend to become centralised in a similar fashion. This pattern of the centralisation of certain service industries can continue to grow as the economy grows. This is obviously not true everywhere in a country, regardless of the level of development, but it does seem to be a tendency overall.

Alright! For those that wonder, Peru is classified as a middle income country. Also, the places where I live and commute have the amenities and purchasing powers of rich countries. As such, you can imagine my surprise when I saw that some dentists have gone mobile, offering their services at the location of their patients. A number of doctors also offer home visits practically for free in my municipality (including medical drugs if needed).

This is not something I would expect to see in Canada unless it would be for very wealthy individuals, which I am not part of. In my province, it is difficult enough just to find a family doctor… we need to have recommendations from existing patients and enough luck for the doctor to even have any time to give to us. This is of course a world away from asking them to make house visits...

Why then do we have these ‘mobile’ services in a municipality that is clearly not impoverished? Most people in my surroundings are also not extremely rich… they are very rich comparatively to most Peruvians but not in absolute terms.

I think the answer comes from my last comment. Although they are not that wealthy compared to the rich in my country, they are rich compared to most people of their country. Peru has a very bad Gini coefficient, which measures income disparity in a country. As such, ‘rich’ people are much wealthier than ‘average’ people, giving rise to a certain opportunity.

Although I would probably enter the “middle-class” category in my country, I am a “wealthy” individual here. As such, my property and income taxes allow for the municipality to subsidise mobile doctors as part of the services the municipality gives me. Also, mobile dentists can charge a lot more (a lot for them but little for us) to offer these house-calls, which makes it profitable for them. Doctors and other physicians seem to be paid fairly low amounts here, which means that richer individuals can easily pay extra to receive preferential treatments.

I won’t get into the discussion of fairness here… I gave up on trying to see anything fair since I came to Peru. I can, however, say for my defense that Economists are not concerned with fairness, we are amoral when we put our Economist hats after all!

Enjoy everyone and talk to you soon!

#Peru #Services #Macroeconomics #GiniCoefficient #IncomeDistribution

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