Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance
© 2016 American Economic Association. All rights reserved. We study choice over prescription insurance plans by the elderly using government administrative data to evaluate how these choices evolve over time. We find large "foregone savings" from not choosing the lowest cost plan that has...
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| Format: | Article |
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American Economic Association
2018
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| Online Access: | http://hdl.handle.net/1721.1/114044 https://orcid.org/0000-0002-9877-3065 |
| _version_ | 1826192680428765184 |
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| author | Abaluck, Jason Todd Gruber, Jonathan |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Abaluck, Jason Todd Gruber, Jonathan |
| author_sort | Abaluck, Jason Todd |
| collection | MIT |
| description | © 2016 American Economic Association. All rights reserved. We study choice over prescription insurance plans by the elderly using government administrative data to evaluate how these choices evolve over time. We find large "foregone savings" from not choosing the lowest cost plan that has grown over time. We develop a structural framework to decompose the changes in "foregone welfare" from inconsistent choices into choice set changes and choice function changes from a fixed choice set. We find that foregone welfare increases over time due primarily to changes in plan characteristics such as premiums and out-of-pocket costs; we estimate little learning at either the individual or cohort level. |
| first_indexed | 2024-09-23T09:27:37Z |
| format | Article |
| id | mit-1721.1/114044 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T09:27:37Z |
| publishDate | 2018 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/1140442022-09-30T14:32:45Z Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance Abaluck, Jason Todd Gruber, Jonathan Massachusetts Institute of Technology. Department of Economics Abaluck, Jason Todd Gruber, Jonathan © 2016 American Economic Association. All rights reserved. We study choice over prescription insurance plans by the elderly using government administrative data to evaluate how these choices evolve over time. We find large "foregone savings" from not choosing the lowest cost plan that has grown over time. We develop a structural framework to decompose the changes in "foregone welfare" from inconsistent choices into choice set changes and choice function changes from a fixed choice set. We find that foregone welfare increases over time due primarily to changes in plan characteristics such as premiums and out-of-pocket costs; we estimate little learning at either the individual or cohort level. National Institute on Aging (R01 AG031270) 2018-03-09T21:32:08Z 2018-03-09T21:32:08Z 2016-08 2018-02-22T19:15:37Z Article http://purl.org/eprint/type/JournalArticle 0002-8282 http://hdl.handle.net/1721.1/114044 Abaluck, Jason, and Jonathan Gruber. “Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance.” American Economic Review 106, no. 8 (August 2016): 2145–2184. © 2016 American Economic Association https://orcid.org/0000-0002-9877-3065 http://dx.doi.org/10.1257/AER.20130778 American Economic Review Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association American Economic Association |
| spellingShingle | Abaluck, Jason Todd Gruber, Jonathan Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance |
| title | Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance |
| title_full | Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance |
| title_fullStr | Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance |
| title_full_unstemmed | Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance |
| title_short | Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance |
| title_sort | evolving choice inconsistencies in choice of prescription drug insurance |
| url | http://hdl.handle.net/1721.1/114044 https://orcid.org/0000-0002-9877-3065 |
| work_keys_str_mv | AT abaluckjasontodd evolvingchoiceinconsistenciesinchoiceofprescriptiondruginsurance AT gruberjonathan evolvingchoiceinconsistenciesinchoiceofprescriptiondruginsurance |