Price discrimination in obstetric services - a case study in Bangladesh

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Price discrimination in obstetric services - a case study in Bangladesh

Author Info

Mohammad Amin (Clinical Epidemiology Program, Ottawa Health Research Institute, Ottawa, Canada)
Kara Hanson (Health Economics and Financing Programme, London School of Hygiene and Tropical Medicine, London, UK)
Anne Mills (Health Economics and Financing Programme, London School of Hygiene and Tropical Medicine, London, UK)

Abstract

This article examines the existence of price discrimination for obstetric services in two private hospitals in Bangladesh, and considers the welfare consequences of such discrimination, i.e. whether or not price discrimination benefited the poorer users. Data on 1212 normal and caesarean section patients discharged from the two hospitals were obtained. Obstetric services were chosen because they are relatively standardised and the patient population is relatively homogeneous, so minimising the scope and scale of product differentiation due to procedure and case-mix differences. The differences between the hospital list price for delivery and actual prices paid by patients were calculated to determine the average rate of discount. The welfare consequences of price discrimination were assessed by testing the differences in mean prices paid by patients from three income groups: low, middle and high. The results suggest that two different forms of price discrimination for obstetric services occurred in both these hospitals. First, there was price discrimination according to income, with the poorer users benefiting from a higher discount rate than richer ones; and second, there was price discrimination according to social status, with three high status occupational groups (doctors, senior government officials, and large businessmen) having the highest probability of receiving some level of discount. Copyright © 2003 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 13 (2004)
Issue (Month): 6 ()
Pages: 597-604
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Handle: RePEc:wly:hlthec:v:13:y:2004:i:6:p:597-604

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Frech Iii & H.E. & Wooley, J.M., 1989. "Consumer Information, Price And Nonprice Competition Among Hospitals," University of California at Santa Barbara, Economics Working Paper Series 6-89, Department of Economics, UC Santa Barbara.

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This page was last updated on 2009-12-13.

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