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Welfare implications of learning through solicitation versus diversification in health care

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  • Basu, Anirban

Abstract

Using Roy's model of sorting behavior, I study welfare implications of learning about medical care quality through the current health care data production infrastructure that relies on solicitation of research subjects. Due to severe adverse-selection issues, I show that such learning could be biased and welfare decreasing. Direct diversification of treatment receipt may solve these issues but is infeasible. Unifying Manski's work on diversified treatment choice under ambiguity and Heckman's work on estimating heterogeneous treatment effects, I propose a new infrastructure based on temporary diversification of access that resolves the prior issues and can identify nuanced effect heterogeneity.

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  • Basu, Anirban, 2015. "Welfare implications of learning through solicitation versus diversification in health care," Journal of Health Economics, Elsevier, vol. 42(C), pages 165-173.
  • Handle: RePEc:eee:jhecon:v:42:y:2015:i:c:p:165-173
    DOI: 10.1016/j.jhealeco.2015.04.001
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    Cited by:

    1. Anirban Basu, 2018. "Comment: Manski's views on patient care under uncertainty," Health Economics, John Wiley & Sons, Ltd., vol. 27(10), pages 1422-1424, October.

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    More about this item

    Keywords

    Learning; Diversification; Comparative effectiveness research; Economic evaluation; Instrumental variables; Heterogeneity;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D6 - Microeconomics - - Welfare Economics
    • I1 - Health, Education, and Welfare - - Health

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