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The 65th Wenlan Forum for Young Scholars in Public Economics / Huang Wei: What is in “Moral Hazard”? Evidence from Quasi Experiments in China?
publish date:2019-12-17 publisher:Sheng Qian

Keynote Speaker: Huang Wei

Topic: What is in “Moral Hazard”? Evidence from Quasi Experiments in China?

Time: 17 December 2019 (Tuesday) 13:00-15:00

Venue: Conference Room 603, Wenquan North Building

Organizer: School of Public Finance and Taxation

Host: Graduate Student Association of the School of Public Finance and Taxation

Keynote Speaker Brief Bio: Huang Wei, President's Distinguished Assistant Professor, National University of Singapore; Postdoctoral Fellow, National Bureau of Economic Research (NBER), USA; PhD in Economics of Harvard University, MA in Economics and BA in Physics of Peking University. His areas of research are public economics, labour economics and health economics. Professor Huang’s research has been published in renowned journals, including Review of Economic and Statistics, Journal of Labor Economics, American Economic Journal: Applied Economics, Nature, Journal of Economic Perspectives and Management World. Since 2018, he has been co-editor-in-chief of Economics of Transition.

Abstract: We explore two different natural experiments in urban China using administrative datawith more than 3 million observations to estimate the price elasticity and income elasticity ofhealthcare utilization. First, we exploit a sharp reduction in inpatient cost sharing at age 80in one city, using a regression discontinuity design (RDD) to examine its effect on utilization.The price elasticity of inpatient care usage ranges from -0.15 to -0.32. The effects are largerfor poorer populations. Second, we explore the timing of pension increases in different years,using an event study approach to estimate their impacts on healthcare usage. For the samepopulation, we find that the income elasticity of inpatient care usage ranges from 1.3-2.0,which suggests that 40-60 percent of the moral hazard is overestimated because of incomeeffect. For the poorer population, approximately 50-70 percent of the price elasticity could beexplained by income effect. Finally, the reduced cost sharing is associated with significantlylower out-of-pocket (OOP) expenditures but has little impact on mortality.