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Does higher Institutional Quality improve the Appropriateness of Healthcare Provision?

Giacomo De Luca, Domenico Lisi (), Marco Martorana and Luigi Siciliani ()

Discussion Papers from Department of Economics, University of York

Abstract: We study the effect of institutional quality on the appropriateness of healthcare provision in Italian hospitals. We focus on cesarean section rates for first-time mothers, which is a common indicator of appropriateness in healthcare and is vulnerable to providers’ opportunistic behaviors. To identify the causal effect of institutional quality we rely on an IV strategy based on historical instruments, exploiting the idea that current differences in institutional quality across regions have been shaped by different cultural and political histories. We find that a standard deviation increase in our indicator of institutional quality leads to a decrease of about 10 percentage points in cesarean section rates, implying an annual saving of about € 50 million. Our results are robust to different measures of institutional quality and samples.

Keywords: institutional quality; appropriateness; healthcare provision (search for similar items in EconPapers)
JEL-codes: I11 D73 C26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur and nep-hea
Date: 2019-05
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