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Moral hazard and the demand for physician services: First lessons from a French natural experiment

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  • Chiappori, Pierre-Andre
  • Durand, Franck
  • Geoffard, Pierre-Yves

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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  • Chiappori, Pierre-Andre & Durand, Franck & Geoffard, Pierre-Yves, 1998. "Moral hazard and the demand for physician services: First lessons from a French natural experiment," European Economic Review, Elsevier, vol. 42(3-5), pages 499-511, May.
  • Handle: RePEc:eee:eecrev:v:42:y:1998:i:3-5:p:499-511
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    1. 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.
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    More about this item

    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; Actuarial Studies

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