Learning by Doing and Learning from Others in Contraception

The paper provides an empirical investigation of the impact of social learning on modern contraceptive prevalence in Indonesia. The empirical analysis tests the hypothesis that own or neighbors’ experience increases the benefit from using modern contraceptives by reducing the uncertainty regarding contraceptive efficacy. The results from the Indonesian Family Life Survey in 1993 and 2000 suggest that the more own experience of modern contraceptives a woman has she is more likely to use those methods. To be specific, one year of own experience increases the propensity to use contraceptives by seven percentage points. However, neighbors’ experience does not have a significant impact on one’s current usage of contraceptives. One explanation of these findings is that the information on contraceptive efficacy, or failure rates is likely to contain much noise when women communicate with each other. These findings contrast those of recent literature, which claim the adoption of contraceptives by one’s social contacts has positive impact on one’s own adoption. To the extent that the social learning process is likely to be constrained by telecommunication technology, one should understand the results in the context of Indonesia in the 1990s.