This paper presents first empirical results on moral hazard in demand for physician services, using a longitudinal dataset on 4578 individuals followed during two years. The data set contains two subgroups, one for which a copayment rate of 10% for physician visits was introduced in 1994, and an other for which no change occured during the period of the study. This enables us to use these data as coming from a controlled natural experiment. We test if the number of visits per agent was modified by this copayment rate. The data reject the hypothesis for office visits, but do not for home visits. This suggests that there is moral hazard in demand for some physician services, but also that when non-monetary costs are important, small changes in monetary price may not induce any major change in behaviour.
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Length: 19 pages Date of creation: 1998 Date of revision: Publication status: Published in European Economic Review, 1998, 42 (3-5), pp. 499-511 Handle: RePEc:del:abcdef:98-05
Find related papers by JEL classification: D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies
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