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Room: Congress Hall A
Time: Fri 16:00 PM-17:15 PM

Experiments in Health Economics

Chair: Matteo Maria Galizzi (Queen Mary University of London)

Session Description

In an economic experiment subjects take decisions and interact in a lab environment designed for a particular purpose. The experiment provides a broad range of data on decisions taken under different settings and therefore allows for evaluation of an aggregate outcome.
The experimental approach shows the advantage with respect to empirical analysis that does not require the implementation of a policy in order to study its effects. Moreover, it allows the experimenter to control the set up that better fits the reality to be analysed, while data used in empirical studies is frequently collected having in mind a specific, possibly different, aim. The advantage with respect to theoretical work is the flexibility on relaxing and testing modelling assumptions.
Lab experiments show further advantages. Firstly, they allow subjects to behave strategically in ways that the researcher could not anticipate, and thus could not program into a simulation, thus capturing strategic behaviour relevant for policymakers when analyzing health policies. Secondly, incentives in experiments are implemented by paying subjects precisely what they earn so that individuals’ incentives may be accurately captured. Finally, the information collected is then analyzed using econometric techniques.
By allowing testing a theory in its own domain, experiments have proven valuable as a methodology for test-bedding policy changes and market designs before implementing them. Test-bedding of market institutions and regulations has been commissioned by a variety of policy makers to analyse several policies (ranging from the sale of treasury bonds, allocating airport slots, matching markets for doctors and hospitals, deregulation of public utilities, etc.)
even in cases where empirical data are typically not available, and theory is often not developed enough to provide unambiguous answers to the many policy issues.
Although very recent and still greatly unexplored, the idea of using experimental data to integrate and support health studies has already attracted the attention of behavioural and health economists to such an extent that the Nobel Prize Daniel Kahneman has addressed it as the most promising field for upcoming experimental research.
In this session we aim at gathering three recent developments in this field to discuss contributions as well as potential applications of experiments in Health Economics. In case of acceptance we will invite experts in the field as discussants of the papers presented.

Session Organizer: Marisa Miraldo (Imperial College London)

Presentations

1. Experimental evidence on health habits and time and risk preferences

   Presenter: Marisa Miraldo (Imperial College London)

2. Altruism and treatment decisions

   Presenter: Ismo Linnosmaa (University of Eastern Finland)

3. Using lab experiments to investigate incentive compatibility and hypothetical bias in discrete choice experiments

   Presenter: Verity Watson (University of Aberdeen)