Ulric B. and Evelyn L. Bray Social Sciences Seminar

Abstract: Low-income patients tend to receive lower quality health care. They have limited access to high quality options and---even conditional on access---are less likely to choose high performing providers.  We show that differential information about quality is an important determinant of this disparity. Our empirical strategy exploits the temporary presence of a website that publicly displayed summary star ratings of general practitioner (GP) offices in England.  Regression discontinuity (RD) estimates show that, on average, patients respond sharply to the information on the website, and that this response is almost entirely driven by residents of low-income neighborhoods. We incorporate these RD moments in a structural demand model that allows for consumer inertia as well as heterogeneity by income in baseline information and preferences. Our results indicate that a meaningful fraction of the income-quality gradient could be eliminated by removing informational differences.