Heterogeneity in Choice Inconsistencies among the Elderly: Evidence from Prescription Drug Plan ChoiceJason Abaluck and Jonathan Gruber American Economic Review, 2011, vol. 101, issue 3, 377-81 Abstract: This paper investigates the degree to which choice inconsistencies documented in the context of Medicare Part D plan choice vary across consumers and geographic regions. Our main finding is that there is surprisingly little variation: regardless of age, gender, predicted drug expenditures or the predictability of drug demand consumers underweight out of pocket costs relative to premiums and fail to consider the individualized consequences of plan characteristics; as a result, they frequently choose plans which are dominated in the sense that an alternative plan provides better risk protection at a lower cost. We find limited evidence that the sickest individuals had more difficulty with plan choice, and we document that much of the variation in potential cost savings across states comes from variation in choice sets, not variation in consumers ability to choose. Date: 2011 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:101:y:2011:i:3:p:377-81 Ordering information: This journal article can be ordered from Access Statistics for this article American Economic Review is currently edited by Esther Duflo More articles in American Economic Review from American Economic Association Contact information at EDIRC. |
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