Health and Pollution in a Vertically Differentiated Duopoly

Stefano Quarta (stefano.quarta@unisalento.it) and Skerdilajda Zanaj
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Stefano Quarta: Facoltà di Economia, University of Salento, Lecce, Italy

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: In this paper, we analyze a vertically differentiated mixed duopoly in medical care services. Pollution is the source of illness. The government has a dual role. It decides how much to invest to reduce the pollution level and it may participate in the health market running a public hospital. We find that the presence of the public provider increases the average quality of the service in the market and it reduces the rate of mortality. Furthermore, when the public hospital offers services with the highest quality, then this has positive spillovers on thequality offered by the private provider. Despite these positive welfare improving features, the mixed duopoly in medical care goes along with a highest level of pollution. In the presence of an increasing concern about the relationship between pollution and health, understanding the role of public intervention appears crucial.

Keywords: pollution; health; public provider; mixed duopoly. (search for similar items in EconPapers)
JEL-codes: H42 H44 I11 L13 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Health and Pollution in a Vertically Differentiated Duopoly (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:18-20

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