Health Services As Credence Goods: A Field Experiment

53 Pages Posted: 18 Sep 2017 Last revised: 2 Oct 2019

See all articles by Felix C.H. Gottschalk

Felix C.H. Gottschalk

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Wanda Mimra

Catholic University of Lille - IESEG School of Management

Christian Waibel

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Date Written: October 2019

Abstract

Agency problems are a defining characteristic of health care markets. We present the results from a field experiment in the market for dental care: A test patient who does not need treatment is sent to 180 dentists to receive treatment recommendations. In the experiment, we vary the socio-economic status (SES) of the patient and whether a second opinion signal is sent. Furthermore, measures of market, practice and dentist characteristics are collected. We observe an overtreatment recommendation rate of 28 % and a striking heterogeneity in treatment recommendations. Furthermore, we find significantly less overtreatment recommendations for patients with higher SES compared to lower SES for standard visits, suggesting a complex role of patients' SES. Competition intensity, measured by dentist density, does not have a significant influence on overtreatment. Dentists with shorter waiting times are more likely to propose unnecessary treatment.

Keywords: Health Care; Credence Goods; Overtreatment; Field Experiment

JEL Classification: C93; D82; I11; L00

Suggested Citation

Gottschalk, Felix and Mimra, Wanda and Waibel, Christian, Health Services As Credence Goods: A Field Experiment (October 2019). Available at SSRN: https://ssrn.com/abstract=3036573 or http://dx.doi.org/10.2139/ssrn.3036573

Felix Gottschalk (Contact Author)

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Wanda Mimra

Catholic University of Lille - IESEG School of Management ( email )

Socle de la Grande Arche
1 Parvis de la Defense
Puteaux, Paris 92800
France

Christian Waibel

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

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