illnesses and pay high prices for ―catastrophic‖ incidents that often put them in debt. That an individual‘s health status constantly fluctuated between illness and well-being and that he or she visited different doctors numerous times, incurring potentially large expenditures for seemingly ―minor‖ illnesses, never emerged as a dominant theme.

In an attempt to capture some of the patterns we observed in the field, we designed and implemented a weekly survey module that was eventually interspersed with monthly-recall modules over a 2-year survey period from 2000 to 2002.<sup>4</sup> Given surprisingly large recall effects in the observational data, we returned in 2008 to experimentally evaluate these effects in a sub-sample of households over a 2-month period.

Across the observational and experimental data, both the rich and poor underreport acute health events in monthly-recall surveys, but the poor underreport more and this underreporting seems to arise from the ―forgetting‖ of entire episodes of acute illness. Among the poor, monthly reporting ―erases‖ almost half the morbidity burden of acute illnesses, over a third of doctor visits for both acute and chronic illnesses, and almost half of all self-medication episodes. Monthly reporting also decreases reports that at least one day of work was lost due to an acute illness by close to a third, again with somewhat higher recall impacts among the poor. We explore the possibility that this ―forgetting‖ is driven by a process of normalization of sickness. Consistent with this hypothesis, we are able to show that recall effects are larger for those individuals and households whose initial sickness burden is also higher; arguably, these are households where sickness has become a ―normal‖ event.

Although we are able to present stark differences for reported morbidity and doctor visits, we should note that we are unable to integrate routine and catastrophic bouts of illness into our results and therefore, provide a full accounting of health _expenditures_ and the impact of different recall periods on health spending. Our results do not apply to episodes of illness associated with very large expenditures. Consistent with results from Banerjee and others (2006), there does not appear to be systematic recall bias on the amount of total expenditures people incur in a given time period. Somewhat intuitively, everyone remembers large expenditures well.<sup>5</sup> We believe that it would take a very large survey or some other sampling technique to get at the frequency of spending on catastrophic illnesses. Since catastrophic illnesses account for a large fraction

> 4 Weekly and monthly recall periods were interspersed to avoid surveyor (and respondent) fatigue and to manage the project within the grant amount.

> 5 In India, a ―large‖ expenditure is different from the world standard for large expenditures.  Nonetheless, such expenditures might still be quite significant to India‘s poor. We cut off ―large‖ expenditures at a level of about $25 US – just about the co-payment for a doctor‘s visit in the US. In richer countries, unlike in India, everyone may avail themselves of life-saving but very expensive procedures – the decision usually does not lie with the patient but with doctors. In India, where the vast majority of the population does not have health insurance, life and death decisions are made more frequently by the patients and, due to the out of pocket costs involved, patients frequently don‘t avail themselves of treatments. So, a full accounting of the cost of the health care system has more endogenous (from the patient‘s perspective) elements in it than would be the case in richer countries.

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