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The Demand for Physician Services. Evidence from a Natural Experiment

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  • Bart COCKX

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Carine BRASSEUR

Abstract

This study exploits a natural experiment in Belgium to estimate the effect of co-payment increases on the demand for physician services. It shows how a differences-in-differences estimator of the price effects can be decomposed into effects induced by the common average proportional price increase (income effects) and by the change in relative prices (substitution effects). The price elasticity of a uniform proportional price increase is relatively small (-.13 for mean and -.03 for woman). Substitution effects are large, especially for women, but imprecisely estimated. Despite the substantial price increases, the efficiency gain of the reform, if any, is modest

Suggested Citation

  • Bart COCKX & Carine BRASSEUR, 2001. "The Demand for Physician Services. Evidence from a Natural Experiment," LIDAM Discussion Papers IRES 2001027, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2001027
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    More about this item

    Keywords

    health care; physician service; co-payment; moral hazard; demand system; differences-in-differences estimator;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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