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Moral Hazard and the Demand for Physician Services: First Lessons from a French Natural Experiment

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Author Info

  • Chiappori, P.A.
  • Durand, F.
  • Geoffard, P.Y.

Abstract

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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Bibliographic Info

Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 98-05.

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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

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Keywords: MORAL HAZARD ; HEALTH SERVICES ; INSURANCE;

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References

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  1. Phelps, Charles E & Newhouse, Joseph P, 1974. "Coinsurance, the Price of Time, and the Demand for Medical Services," The Review of Economics and Statistics, MIT Press, vol. 56(3), pages 334-42, August.
  2. Michel Glaude & Laurent Caussat, 1993. "Dépenses médicales et couverture sociale," Économie et Statistique, Programme National Persée, vol. 265(1), pages 31-43.
  3. Pierre-Andre Chiappori & Bernard Salanie, 2000. "Testing for Asymmetric Information in Insurance Markets," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 56-78, February.
  4. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-77, June.
  5. Dionne, G. & Gourieroux, C. & Vanasse, C., 1998. "Evidence of Adverse Selection in Automobile Insurance Markets," Papers 9822, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
  6. repec:fth:inseep:9701 is not listed on IDEAS
  7. Chiappori, Pierre-Andre & Salanie, Bernard, 1997. "Empirical contract theory: The case of insurance data," European Economic Review, Elsevier, vol. 41(3-5), pages 943-950, April.
  8. repec:fth:inseep:9711 is not listed on IDEAS
  9. Wilson, Charles, 1977. "A model of insurance markets with incomplete information," Journal of Economic Theory, Elsevier, vol. 16(2), pages 167-207, December.
  10. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
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