Why Do Previous Choices Matter for Hospital Demand? Decomposing Switching Costs from Unobserved Preferences

• 成果类型: Article
• 署名作者: Raval, Devesh; Rosenbaum, Ted
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_00741
• 发表日期: 2018-12
• 页码: 906-915
• 关键词: competition; MARKETS; prices

摘要

Using data on women's choice of hospital for childbirth in Florida, we find that women return to the same hospital approximately 70% of the time. We separate explanations of switching costs and unobserved preference heterogeneity using a panel data fixed effects estimator and find that switching costs account for approximately 40% of the demand effects of a lagged dependent variable. The welfare effects of excluding a hospital from a payer's network are smaller in the short run but higher in the long run, given our estimates of switching costs, and the dynamic effects of entry on competition are significantly smaller.