We investigate the role of perceived price and quality on consumer choice for four different health conditions across public and private providers using a nationally representative survey in Malaysia. We estimate a mixed logit model and show that consumers value different dimensions of quality depending on the health condition. Furthermore, increasing perceived prices for private providers reduces demand for minor, more frequent health conditions such as flu, fever, or cough, but increases demand for more complex, severe conditions such as coronary artery bypass graft. These findings provide empirical support for price regulation which differentiates the severity of underlying health conditions.
Lim, Kai Shen, Wei Aun Yap, and Winnie Yip. 2022. “Consumer Choice and Public‐private Providers: The Role of Perceived Prices.” Health Economics hec.4554. doi: 10.1002/hec.4554.