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Information, Switching Costs, and Consumer Choice : Evidence from Two Randomized Field Experiments in Swedish Primary Health Care

Anell, Anders LU ; Dietrichson, Jens; Ellegård, Lina Maria LU and Kjellsson, Gustav (2017) In Working Papers 2017(7).
Abstract
Consumers of services that are financed by a third party, such as publicly financed health care or firm-sponsored health plans, are often allowed to freely choose provider. The rationale is that consumer choice may improve the matching of consumers and providers and spur quality competition. Such improvements are contingent on consumers having access to comparative information about providers and acting on this information when making their choice. However, in the presence of information frictions and switching costs, consumers may have limited ability to find suitable providers. We use two large-scale randomized field experiments in primary health care to examine if the choice of provider is affected when consumers receive comparative... (More)
Consumers of services that are financed by a third party, such as publicly financed health care or firm-sponsored health plans, are often allowed to freely choose provider. The rationale is that consumer choice may improve the matching of consumers and providers and spur quality competition. Such improvements are contingent on consumers having access to comparative information about providers and acting on this information when making their choice. However, in the presence of information frictions and switching costs, consumers may have limited ability to find suitable providers. We use two large-scale randomized field experiments in primary health care to examine if the choice of provider is affected when consumers receive comparative information by postal mail and small costs associated with switching are reduced. The first experiment targeted a subset of the general population in the Swedish region Skåane, and the second targeted new residents in the region, who should have less prior information and lower switching costs. In both cases, the propensity to switch provider increased significantly after the intervention. The effects were larger for new residents than for the general population, and were driven by individuals living reasonably close to alternative providers. (Less)
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author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
consumer choice, information, switching costs, primary health care, field experiments, D83, I11, I18
in
Working Papers
volume
2017
issue
7
pages
52 pages
publisher
Department of Economics, Lund University
language
English
LU publication?
yes
id
2209ec95-daf5-48dd-9711-64e53648bc92
date added to LUP
2017-05-22 13:44:00
date last changed
2017-05-22 13:44:00
@misc{2209ec95-daf5-48dd-9711-64e53648bc92,
  abstract     = {Consumers of services that are financed by a third party, such as publicly financed health care or firm-sponsored health plans, are often allowed to freely choose provider. The rationale is that consumer choice may improve the matching of consumers and providers and spur quality competition. Such improvements are contingent on consumers having access to comparative information about providers and acting on this information when making their choice. However, in the presence of information frictions and switching costs, consumers may have limited ability to find suitable providers. We use two large-scale randomized field experiments in primary health care to examine if the choice of provider is affected when consumers receive comparative information by postal mail and small costs associated with switching are reduced. The first experiment targeted a subset of the general population in the Swedish region Skåane, and the second targeted new residents in the region, who should have less prior information and lower switching costs. In both cases, the propensity to switch provider increased significantly after the intervention. The effects were larger for new residents than for the general population, and were driven by individuals living reasonably close to alternative providers.},
  author       = {Anell, Anders and Dietrichson, Jens and Ellegård, Lina Maria and Kjellsson, Gustav},
  keyword      = {consumer choice,information,switching costs,primary health care,field experiments,D83,I11,I18},
  language     = {eng},
  month        = {05},
  note         = {Working Paper},
  number       = {7},
  pages        = {52},
  publisher    = {Department of Economics, Lund University },
  series       = {Working Papers},
  title        = {Information, Switching Costs, and Consumer Choice : Evidence from Two Randomized Field Experiments in Swedish Primary Health Care},
  volume       = {2017},
  year         = {2017},
}