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Using Audit Studies to Test for Physician Induced Demand: The Case of Antibiotic Abuse in China

  • Janet Currie
  • Wanchuan Lin
  • Juanjuan Meng

The overuse of medical services including antibiotics is often blamed on Physician Induced Demand. But since this theory is about physician motivations, it is difficult to test. We conduct an audit study in which physician financial incentives, beliefs about what patients want, and desires to reciprocate for a small gift are systematically varied. We find that all of these treatments reduce antibiotics prescriptions, suggesting that antibiotics abuse in China is not driven by patients actively demanding antibiotics, by physicians believing that patients want antibiotics, or by physicians believing that antibiotics are in the best interests of their patients, but is largely driven by financial incentives. Our results also show that physician behavior can be significantly influenced by the receipt of a token gift, such as a pen.

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File URL: http://www.nber.org/papers/w18153.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18153.

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Date of creation: Jun 2012
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Publication status: published as "Addressing Antibiotic Abuse in China: An Experimental Audit Study," Journal of Development Economics, v. 110, Sept. 2014, with Wanchuan Lin and Juanjuan Meng, 39-51
Handle: RePEc:nbr:nberwo:18153
Note: HC HE
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  1. Carmichael, H Lorne & MacLeod, W Bentley, 1997. "Gift Giving and the Evolution of Cooperation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(3), pages 485-509, August.
  2. Fuchs, Victor R., 2004. "Reflections on the socio-economic correlates of health," Journal of Health Economics, Elsevier, vol. 23(4), pages 653-661, July.
  3. Sun, Xiaoyun & Jackson, Sukhan & Carmichael, Gordon A. & Sleigh, Adrian C., 2009. "Prescribing behaviour of village doctors under China's New Cooperative Medical Scheme," Social Science & Medicine, Elsevier, vol. 68(10), pages 1775-1779, May.
  4. Lu, Fangwen, 2014. "Insurance coverage and agency problems in doctor prescriptions: Evidence from a field experiment in China," Journal of Development Economics, Elsevier, vol. 106(C), pages 156-167.
  5. Thomas G. McGuire & Mark V. Pauly, 1991. "Physician Response to Fee Changes with Multiple Payers," Papers 0015, Boston University - Industry Studies Programme.
  6. Dranove, David, 1988. "Pricing by non-profit institutions : The case of hospital cost-shifting," Journal of Health Economics, Elsevier, vol. 7(1), pages 47-57, March.
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