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Title:In absolute or relative terms? How framing prices affects the consumer price sensitivity of health plan choice PDF Logo
Authors:Schmitz, Hendrik
Ziebarth, Nicolas R.
Issue Date:2011
Series/Report no.:Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6241
Abstract:This paper provides field evidence on (a) how price framing affects consumers' decision to switch health insurance plans and (b) how the price elasticity of demand for health insurance can be influenced by policymakers through simple regulatory efforts. In 2009, in order to foster competition among health insurance companies, German federal regulation required health insurance companies to express price differences between health plans in absolute Euro values rather than percentage point payroll tax differences. Using individual-level panel data, as well as aggregated health plan-level panel data, we find that the reform led to a sixfold increase in an individual's switching probability and a threefold demand elasticity increase.
Subjects:health insurance
health plan switching
price competition
price elasticity
SOEP
JEL:H51
I11
I18
Persistent Identifier of the first edition:urn:nbn:de:101:1-201202285103
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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