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Does the market reward quality? Evidence from India

Author

Listed:
  • Zachary Wagner

    (RAND Corporation)

  • Somalee Banerjee

    (NEERMAN Research)

  • Manoj Mohanan

    (Duke University)

  • Neeraj Sood

    (University of Southern California)

Abstract

There are two salient facts about health care in low and middle-income countries; (1) the private sector plays an important role and (2) the care provided is often of poor quality. Despite these facts we know little about what drives quality of care in the private sector and why patients seek care from poor quality providers. We use two field studies in India that provide insight into this issue. First, we use a discrete choice experiment to show that patients strongly value technical quality. Second, we use standardized patients to show that better quality providers are not able to charge higher prices. Instead providers are able to charge higher prices for elements of quality that the patient can observe, which are less important for health outcomes. Future research should explore whether accessible information on technical quality of local providers can shift demand to higher quality providers and improve health outcomes.

Suggested Citation

  • Zachary Wagner & Somalee Banerjee & Manoj Mohanan & Neeraj Sood, 2023. "Does the market reward quality? Evidence from India," International Journal of Health Economics and Management, Springer, vol. 23(3), pages 467-505, September.
    • Handle: RePEc:kap:ijhcfe:v:23:y:2023:i:3:d:10.1007_s10754-022-09341-w
    DOI: 10.1007/s10754-022-09341-w
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    Cited by:

    1. Kai Shen Lim & Wei Aun Yap & Winnie Yip, 2022. "Consumer choice and public‐private providers: The role of perceived prices," Health Economics, John Wiley & Sons, Ltd., vol. 31(9), pages 1898-1925, September.
    2. He, Daixin & Lu, Fangwen & Yang, Jianan, 2023. "Impact of self- or social-regarding health messages: Experimental evidence based on antibiotics purchases," Journal of Development Economics, Elsevier, vol. 163(C).

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    More about this item

    Keywords

    Child diarrhea; Standardized patients; Health care quality; India;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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