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How product standardization affects choice: Evidence from the Massachusetts Health Insurance Exchange

Listed author(s):
  • Ericson, Keith M. Marzilli
  • Starc, Amanda

This paper examines the effect of choice architecture on Massachusetts' Health Insurance Exchange. A policy change standardized cost-sharing parameters of plans across insurers and altered information presentation. Post-change, consumers chose more generous plans and different brands, but were not more price-sensitive. We use a discrete choice model that allows the policy to affect how attributes are valued to decompose the policy's effects into a valuation effect and a product availability effect. The brand shifts are largely explained by the availability effect and the generosity shift by the valuation effect. A hypothetical choice experiment replicates our results and explores alternative counterfactuals.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167629616302156
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Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 50 (2016)
Issue (Month): C ()
Pages: 71-85

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Handle: RePEc:eee:jhecon:v:50:y:2016:i:c:p:71-85
DOI: 10.1016/j.jhealeco.2016.09.005
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505560

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