Competition, Equity and Quality in Public Services

Maija Halonen-Akatwijuka and Carol Propper

No 2024-03, Working Papers from Centre for Health Economics, Monash University

Abstract: This paper examines the implications of consumer heterogeneity for the choice of competition and monopoly in public services delivery. In a setting with motivated providers who favour one type of service user over another, we show that competition can raise average quality. However, this may be at the expense of the minority type of user if the providers favour the majority type. Then an inequity averse regulator may protect the minority by not introducing competition. Alternatively, if the providers favour the minority type, the regulator may introduce competition to incentivize the providers to pay attention to the less rewarding majority type.

Keywords: Public services; Competition; Quality; Inequity aversion (search for similar items in EconPapers)
JEL-codes: H11 I11 I14 I24 L31 (search for similar items in EconPapers)
Date: 2024-03
New Economics Papers: this item is included in nep-com, nep-mic, nep-reg and nep-ure
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Journal Article: Competition, equity and quality in public services (2024)
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