Information, switching costs, and consumer choice: Evidence from two randomised field experiments in Swedish primary health care

Anders Anell, Jens Dietrichson, Lina Maria Ellegård and Gustav Kjellsson

Journal of Public Economics, 2021, vol. 196, issue C

Abstract: Consumer choice policies may improve the matching of consumers and providers, and may spur competition over quality dimensions relevant to consumers. However, the gains from choice may fail to materialise in markets characterised by information frictions and switching costs. We use two large-scale randomised field experiments in primary health care to examine if individuals reconsider their provider choice when receiving leaflets with comparative information and pre-paid choice forms by postal mail. The first experiment targeted a representative subset of the 1.3 million residents in a Swedish region. The second targeted new residents in the same region, a group expected to have less prior information and lower switching costs than the general population. The propensity to switch providers increased after the interventions in both the population-representative sample (by 0.6–0.8 percentage points, 10–14%) and among new residents (2.3 percentage points, 26%). The results demonstrate that there are demand side frictions in the primary care market. Exploratory analyses indicate that the effects on switching were larger in urban markets and that the interventions had heterogeneous effects on the type of providers chosen, and on health care and drug consumption.

Keywords: Information friction; Switching costs; Consumer choice; Field experiment; Primary care (search for similar items in EconPapers)
JEL-codes: D89 I11 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Information, Switching Costs, and Consumer Choice: Evidence from Two Randomized Field Experiments in Swedish Primary Health Care (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:196:y:2021:i:c:s0047272721000268

DOI: 10.1016/j.jpubeco.2021.104390

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