Health Services As Credence Goods: A Field Experiment
53 Pages Posted: 18 Sep 2017 Last revised: 10 Sep 2018
Date Written: July 25, 2018
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. We vary the level of information and socio-economic status (SES) of the patient and collect measures of market conditions. We observe an overtreatment recommendation rate of 28% and a striking heterogeneity in treatment recommendations. We find significantly less overtreatment recommendations for the patient with higher SES compared to lower SES under standard information. This difference diminishes for informed patients suggesting a complex role of patients' SES. Dentists with lower utilization, measured by waiting time for the next possible appointment, are more likely to propose unnecessary treatment.
Keywords: Health Care; Credence Goods; Overtreatment; Market Environment
JEL Classification: C93; D82; I11; L00
Suggested Citation: Suggested Citation