Firms, Markets and Quality Provision in Developing Countries
Friday, Jan. 4, 2019 2:30 PM - 4:30 PM
- Chair: Jie Bai, Harvard University
Market Linkages for Smallholder Farmers in Uganda
AbstractTrade frictions in developing country food markets can have tremendous welfare costs because of the dual role of crops as the dominant income generator and the primary source of nutrition. In this paper, we utilize a multi-pronged experiment to designed to reduce search costs and increase market integration. We partner with one of Uganda’s largest private-sector brokerage companies to introduce a mobile trading platform designed to reduce search costs by linking buyers and sellers of agricultural commodities. We further collect biweekly market price information from 260 markets across Uganda and disseminate this information to farmers, intermediaries, and buyers. We exploit these prices surveys to estimate the impact of the platform on price dispersion and market efficiency. Large-scale farmer and trader surveys shed light on the distribution of welfare effects from this intervention.
Production Networks and Skill Intensity
AbstractUsing a unique data of firm-level production and firm-to-firm trade from Turkey, we document that for Turkish manufacturing firms, the intermediate input buyer and supplier’s skill intensity is positively correlated, both in the cross-section and overtime. This positive relationship remains even after we control for firm heterogeneity in size. We interpret this as evidence for the potential complementarity of firm’s quality production. Using the textile and apparel industry firms as a case study, we construct a model of firm production and matching to structurally quantify the extent of this theoretical channel.
Public insurance, reimbursement design and access to healthcare in India
AbstractOur article studies the design of reimbursement rates in the context of a large-scale publicly funded health insurance program in India by exploring its effects on the quality of care, diagnostic facilities provided by the hospitals and welfare of the patients. Under this insurance program implemented in the state of Andhra Pradesh, for 938 listed procedures, close to 40 million eligible households get free treatment from hospitals, and the hospitals are reimbursed by the government. The level of reimbursement is the key decision variable for the government. Setting the level too low implies that not enough private hospitals will participate, and the program will have capacity shortfalls and potentially lower quality.
Setting the level too high implies that the fiscal burden will be high, which might be unsustainable in the future. To study this problem, we gather a unique and novel dataset that records the universe of claims made by the patients in the state of Andhra-Pradesh. Our data covers patient characteristics as well as details of diagnosis for each patient. Additionally, we collect detailed data on hospital characteristics, including provision of hospital facilities, quality of care as well as entry and exit of hospitals over time. We build a structural model and estimate the underlying incentives for patient's choice of hospital, hospitals' decision to participate in the insurance program as well as the provision of quality of care conditional on participation. Given the parameter estimates, in
our counterfactual exercise, we vary the reimbursement rates, simulate hospitals' decisions to participate and provision of quality, and compute corresponding consumer welfare. Our exercise enables us to characterize the optimal reimbursement design that maximizes consumer welfare given budget constraint by the government. In a recent ambitious move announced in 2018, the Indian government is planning to scale up similar insurance program to cover 500 million individuals across 30 states in India, and our exercise will enable us to develop a practical policy tool to design reimbursement rates as a function of market and hospital characteristics that can be portably used across states.
- L1 - Market Structure, Firm Strategy, and Market Performance
- O1 - Economic Development