Income effects and physician labour supply: evidence from the threshold system in Ontario

Jasmin Kantarevic, Boris Kralj and Darrel Weinkauf

Canadian Journal of Economics, 2008, vol. 41, issue 4, pages 1262-1284

Abstract: We examine a reform to the physician threshold system in Ontario that provides a unique opportunity to assess the effect of fee changes on physician behaviour, free from the biases that potentially affect simple time-series or cross-section inference. We find that: (1) the income effects of fee changes are small, but significant; (2) the income effect dominates the substitution effect only for a minority of services with relatively low prices and high volumes; and (3) the cross effects of fee changes tend to be significant only for services with relatively high prices and low volumes.

JEL-codes: I12 I18 (search for similar items in EconPapers)
Date: 2008

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