NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Welfare Implications of Learning Through Solicitation versus Diversification in Health Care

Anirban Basu

NBER Working Paper No. 20376
Issued in August 2014
NBER Program(s):Health Care, Health Economics, Technical Working Papers

This paper uses Roy's model of sorting behavior to study welfare implication of current health care data production infrastructure that relies on solicitation of research subjects. We show that due to severe adverse-selection issues, directionality of bias cannot be established and welfare may decrease due to new data. Direct diversification of treatment receipt may solve these issues but is infeasible. Unifying Manski's work diversified treatment choice under ambiguity and Heckman's work on estimating heterogeneous treatment effects, the paper proposes a new infrastructure based on temporary diversification of access that resolves the prior issues and can identify nuanced effect heterogeneity.

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Document Object Identifier (DOI): 10.3386/w20376

Published: Anirban Basu, 2015. "Welfare implications of learning through solicitation versus diversification in health care," Journal of Health Economics, vol 42, pages 165-173. citation courtesy of

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