Demand Analysis With Supply-Side Rationing: An Application to the US Dialysis Market
Abstract/Contents
- Abstract
- Supply-side rationing is common in markets that do not rely exclusively on prices to determine allocation. Examples include matching markets for schools and colleges; entry-level labor markets; and healthcare services. In these cases, consumer choice sets are constrained endogeneously by supply-side admission policies induced by capacity constraints. We use a random utility model for consumer preferences and a reduced-form rationing rule for the supply side that can be derived from models of the examples described above. We study identification of this model, propose an estimator, and apply these methods to study admissions in the market for kidney dialysis in California. Our results establish identification of the model using two sets of instruments, one that only affects consumer preferences and the other that only affects the rationing rule. These results also suggest tests of supply-side rationing, which we apply to the dialysis market. We find that dialysis facilities are less likely to admit new patients when they have higher than normal caseload and that patients are more likely to travel further when nearby facilities, and high quality facilities in particular, have high caseloads. Finally, we use these data to estimate the preferences of consumers and the rationing rules used by facilities using a Gibbs’ sampler.
Description
| Type of resource | text |
|---|---|
| Date created | July 14, 2021 |
Creators/Contributors
| Author | Agarwal, Nikhil |
|---|---|
| Author | Somaini, Paulo |
| Organizer of meeting | Santos, Andres |
| Organizer of meeting | Shaikh, Azeem |
| Organizer of meeting | Wolak, Frank |
Subjects
| Subject | economics |
|---|---|
| Genre | Text |
| Genre | Working paper |
| Genre | Grey literature |
Bibliographic information
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- This work is licensed under a Creative Commons Attribution 4.0 International license (CC BY).
Preferred citation
- Preferred citation
- Agarwal, N. and Somaini , P. (2022). Demand Analysis With Supply-Side Rationing: An Application to the US Dialysis Market. Stanford Digital Repository. Available at https://purl.stanford.edu/qz834fk6040
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SITE Conference 2021
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