Vol 7 No 2 (2020)
Articles

Dealing with Demand Heterogeneity on Health Care Provider Choice – The Case of Rural China

Martine Audibert
Universite Clermont Auvergne, CNRS, CERDI, France.
Yong He
Universite Clermont Auvergne, CNRS, CERDI, France.
Jacky Mathonnat
Professor Emeritus in Economics, Clermont Auvergne University, Senior Fellow, FERDI, France.
Published May 15, 2020
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Keywords
  • Price effect, Distance effect, Healthcare choice, Preference heterogeneity, Multinomial logit, Mixed multinomial logit models, Chinese rural households.
Citations
How to Cite
Audibert, M., He, Y., & Mathonnat, J. (2020). Dealing with Demand Heterogeneity on Health Care Provider Choice – The Case of Rural China. Asian Journal of Economics and Empirical Research, 7(2), 258-267. https://doi.org/10.20448/journal.501.2020.72.258.267

Abstract

We built a database of two samples of patients surveyed within the same regions in rural China over a time interval of 18 years, and presumed varying demand heterogeneity due to income increase and people aging. We find that while the mean price and distance negative effects on patients choice were present in both time periods, their differences in heterogeneity, which were confirmed with the mixed multinomial logit (MMNL), could have crucial importance in avoiding erroneous policy making based merely on mean price and distance effects. We also find that while both the multinomial logit (MNL) and the MMNL are able to predict price and distance effects with low heterogeneity, only the MMNL appears able to detect the price effect when heterogeneity is high. These findings suggest using caution when interpreting estimation results with the MNL in cases of high heterogeneity.

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