Market Size and Trade in Medical Services

107 Pages Posted: 17 Mar 2023 Last revised: 29 Apr 2024

See all articles by Jonathan I. Dingel

Jonathan I. Dingel

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Joshua D. Gottlieb

National Bureau of Economic Research (NBER); University of Chicago

Maya Lozinski

University of Chicago

Pauline Mourot

University of Chicago - Booth School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: April 29, 2024

Abstract

We uncover substantial interregional trade in medical services and investigate whether regional increasing returns explain it. In Medicare data, one-fifth of production in-volves a doctor treating a patient from another region. Larger regions produce greater quantity, quality, and variety of medical services, which they “export” to patients from elsewhere, especially smaller regions. We show that these patterns reflect scale economies: greater demand enables larger regions to improve quality, so they attract patients from elsewhere. Despite concerns about rural access, larger regions have higher marginal returns to spending. We study counterfactual policies that would lower travel costs rather than relocating production.

Keywords: healthcare access, market-size effects, Medicare claims data, trade in services

JEL Classification: F12, F14, I11, R12

Suggested Citation

Dingel, Jonathan I. and Gottlieb, Joshua D. and Gottlieb, Joshua D. and Lozinski, Maya and Mourot, Pauline, Market Size and Trade in Medical Services (April 29, 2024). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2023-37, Available at SSRN: https://ssrn.com/abstract=4391865 or http://dx.doi.org/10.2139/ssrn.4391865

Jonathan I. Dingel

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

HOME PAGE: http://www.jdingel.com

National Bureau of Economic Research (NBER) ( email )

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Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Joshua D. Gottlieb (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://papers.nber.org/authors/joshua_gottlieb

University of Chicago ( email )

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Chicago, IL 60637
United States

HOME PAGE: http://www.gottlieb.ca/

Maya Lozinski

University of Chicago ( email )

Pauline Mourot

University of Chicago - Booth School of Business ( email )

5807 S Woodlawn Ave
Chicago, IL 60637
United States

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