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Price dispersion in an online health marketplace: Evidence from telemedicine services in China

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  • Xiang, Jia
  • Cheng, Terence C.
  • Fu, Hongqiao
  • Yip, Winnie

Abstract

Online health care marketplaces have emerged with the adoption of telemedicine during the COVID-19 pandemic. Despite its readily available information on price and quality, we document substantial price dispersion for telemedicine services in China's internet health market. We further examine the sources of such price variation: observable characteristics of physicians, hospitals, and local markets explain slightly over half of this variation. The un- explained portion is greater for physician specialties where search frictions are likely larger.

Suggested Citation

  • Xiang, Jia & Cheng, Terence C. & Fu, Hongqiao & Yip, Winnie, 2024. "Price dispersion in an online health marketplace: Evidence from telemedicine services in China," Economics Letters, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:ecolet:v:234:y:2024:i:c:s0165176523004615
    DOI: 10.1016/j.econlet.2023.111435
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    References listed on IDEAS

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    1. Zack Cooper & Stuart V Craig & Martin Gaynor & John Van Reenen, 2019. "The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 51-107.
    2. Randall D. Cebul & James B. Rebitzer & Lowell J. Taylor & Mark E. Votruba, 2011. "Unhealthy Insurance Markets: Search Frictions and the Cost and Quality of Health Insurance," American Economic Review, American Economic Association, vol. 101(5), pages 1842-1871, August.
    3. Alan T. Sorensen, 2000. "Equilibrium Price Dispersion in Retail Markets for Prescription Drugs," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 833-862, August.
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