Researchers Christopher McKelvey, Duncan Thomas, and Elizabeth Frankenberg examined the impact of a drastic change in prices and household resources on women’s use of contraceptives. Using survey data from the Indonesia Family Life Survey (IFLS), they found that:

• Large changes in the prices of modern contraceptives had little impact on overall contraceptive use in the Indonesian market, at least in the period immediately following the price changes.
• A significant decrease in household financial resources had a minimal effect on demand for family planning services in Indonesia.

The study suggests that reducing public subsidies for family planning services, which would push contraceptive prices up, may not reduce contraceptive prevalence in similar settings. Hence, phasing out subsidies for the procurement and distribution of contraceptive supplies might free up resources to cover other program costs. Such savings might also be used to target subsidies where they would have a larger impact.