Does It Pay to Know Prices in Health Care?

Author:

Lieber Ethan M.J.1

Affiliation:

1. Department of Economics, University of Notre Dame, 915 Flanner Hall, Notre Dame, Indiana, 46556 (e-mail: )

Abstract

Consumers rarely know the price of medical care before they consume it. I use variation in the timing of access to a new source of price information to show how access to and search for price information leads consumers to pay significantly less for care. I provide suggestive evidence that insurance coverage inhibits the use of price information, rationalizing the relatively low rates of search. The results indicate that availability of price information could have large impacts on prices even in the absence of general equilibrium effects. (JEL D82, D83, G22, I11, I13)

Publisher

American Economic Association

Subject

General Economics, Econometrics and Finance

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