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Paying informally in the Albanian health care sector: a two-tiered stochastic frontier model

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  • Sonila Tomini

    ()

  • Wim Groot
  • Milena Pavlova
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    Abstract

    Informal payments are deeply ingrained in the health care sector of most Central, Eastern and Southern European countries. Evidence suggests that the price paid informally to medical staff is negotiated either directly or indirectly between patients and medical staff. The aim of this paper is to measure the imperfect information that exists on the amount that has to be paid informally to medical staff. We measure the extent to which patients pay more than the amount medical staff expect informally and the extent to which medical staff request less than patients are willing to pay informally. A two-tiered stochastic frontier model is developed to estimate indicators of patients’ and medical staff’s imperfect information on informal payments and the effects on the amount the other party is minimally expecting or maximally willing to pay informally. The estimates are based on informal payments to medical staff in the inpatient health care sector in Albania. We use data from the Albania Living Standards Measurement Survey 2002 and 2005. The pooled samples include 707 individuals who have visited inpatient health care services in these 2 years. Our results show that medical staff has less information on the patients’ maximum willingness to pay informally than patients have on medical staff’s minimum expected amount. These estimates do not depend on categories of illnesses but on certain socio-demographic characteristics. Copyright The Author(s) 2012

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    File URL: http://hdl.handle.net/10.1007/s10198-011-0331-1
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    Bibliographic Info

    Article provided by Springer in its journal The European Journal of Health Economics.

    Volume (Year): 13 (2012)
    Issue (Month): 6 (December)
    Pages: 777-788

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    Handle: RePEc:spr:eujhec:v:13:y:2012:i:6:p:777-788

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    Web page: http://link.springer.de/link/service/journals/10198/index.htm

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    Related research

    Keywords: Informal payments; Imperfect information; Stochastic model; Maximum willingness to pay informally; I11; I19; D82;

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    1. Polachek, Solomon W & Yoon, Bong Joon, 1987. "A Two-tiered Earnings Frontier Estimation of Employer and Employee Information in the Labor Market," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 296-302, May.
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    10. Xavier, Ana & Robin Thompson, 2003. "Unofficial payments for acute state hospital care in Kazakhstan. A model of physician behaviour with price discrimination and vertical service differentiation," Royal Economic Society Annual Conference 2003 224, Royal Economic Society.
    11. Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
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