Welfare Implications of Learning Through Solicitation versus Diversification in Health Care

Anirban Basu

No 20376, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper uses Roy's model of sorting behavior to study welfare implication of current health care data production infrastructure that relies on solicitation of research subjects. We show that due to severe adverse-selection issues, directionality of bias cannot be established and welfare may decrease due to new data. Direct diversification of treatment receipt may solve these issues but is infeasible. Unifying Manski's work diversified treatment choice under ambiguity and Heckman's work on estimating heterogeneous treatment effects, the paper proposes a new infrastructure based on temporary diversification of access that resolves the prior issues and can identify nuanced effect heterogeneity.

JEL-codes: C01 C9 D6 I1 I18 (search for similar items in EconPapers)
Date: 2014-08
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Published as Anirban Basu, 2015. "Welfare implications of learning through solicitation versus diversification in health care," Journal of Health Economics, vol 42, pages 165-173.

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Journal Article: Welfare implications of learning through solicitation versus diversification in health care (2015)
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