“Social Learning and Health Plan Choice.”

Stanford University, USA.
The RAND Journal of Economics (Impact Factor: 1.49). 02/2006; 37(4):1-29. DOI: 10.1111/j.1756-2171.2006.tb00064.x
Source: PubMed


I use data from the University of California to empirically examine the role of social learning in employees' choices of health plans. The basic empirical strategy starts with the observation that if social learning is important, health plan selections should appear to be correlated across employees within the same department. Estimates of discrete choice models in which individuals' perceived payoffs are influenced by coworkers' decisions reveal a significant (but not dominant) social effect. The strength of the effect depends on factors such as the department's size or the employee's demographic distance from her coworkers. The estimated effects are present even when the model allows for unobserved, department-specific heterogeneity in employee preferences, so the results cannot be explained away by unobservable characteristics that are common to employees of the same department.

Full-text preview

Available from:
  • Source
    • "Instead, experiences are more powerful when shared. Sorensen (2006) claims that there is a role for social learning wherever an individual is surrounded by others and is faced by a problem for which they do not have a clear answer. A practical example provided is a situation in which an individual has intentions of buying a vehicle. "

    Preview · Article · Dec 2014
  • Source
    • "Based on the conjecture that individuals may be more likely to interact with co-villagers who share common observable characteristics, we should observe stronger social effects within subgroups than across subgroups in the village (Duflo and Saez, 2002; Sorensen, 2006). If individuals' enrollment decisions are influenced by their observations of others' behavior , there may be opinion leaders in rural villages who appear to have expertise and the ability to make informed NCMS enrollment decisions (Bikhchandani et al., 1998). "
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper examines the role of social learning in household enrollment decisions for the New Cooperative Medical Scheme (NCMS) in rural China by estimating a static game with incomplete information. Using a rich dataset from the China Health and Nutrition Survey, we find that a 10-percentage-point increase in the enrollment rate in a village increases one's take-up probability by 5 percentage points. Using multiple model specifications, we show that the estimated social effects are not driven by simultaneity or common unobserved factors but are consistent with the hypothesis of social learning. We also find that the importance of social effects decreases significantly with households’ familiarity with the NCMS as well as with the development of alternative information channels, which further ascertains that the primary mechanism for the social effects is social learning. The evidence suggests that healthier, wealthier, relatively well-educated, older Han male household heads tend to be opinion leaders.
    Full-text · Article · Jan 2014 · Journal of Economic Behavior & Organization
  • Source
    • "Epstein and Nicholson (2009) …nd that an increase in the overall c-section rate of a physician's local peer group leads to an increase in his or her own rate. 3 Social learning has been studied widely in a variety of contexts including , but not limited to , employer - sponsored health plan choices ( Sorensen , 2006 ) , retirement plan choices ( Du ‡o and Saez , 2003 ) , welfare program participation ( Bertrand , Luttmer , and Mullainathan , 2000 ) , health care utilization in Milan ( Dev - illanova , 2008 ) , consumption of movies ( Moretti , 2011 ) , and other examples , such as crime and labor market outcomes, which are cited in those studies . his or her peers . "
    [Show abstract] [Hide abstract]
    ABSTRACT: We investigate whether and how physicians’prescriptions of a new drug are influenced by their colleagues in the same hospital during shared working time. We use longitudinal data of physicians who prescribed antipsychotic drugs for schizophrenia patients in Taiwan between 1997 and 2010. We find that peer effects are small, but stronger among physicians of similar age and among those sharing a longer, larger or more stable group. Peer effects are also stronger when drugs are newly introduced. We also …find that peer effects are more likely to be over-estimated using …fixed-effect models than using fi…rst-difference models.
    Full-text · Article · Jun 2013 · Economic Inquiry
Show more