Working Paper: NBER ID: w10811
Authors: Amitabh Chandra; Douglas Staiger
Abstract: Productivity spillovers are often cited as a reason for geographic specialization in production. A large literature in medicine documents specialization across areas in the use of surgical treatments, which is unrelated to patient outcomes. We show that a simple Roy model of patient treatment choice with productivity spillovers can generate these facts. Our model predicts that high-use areas will have higher returns to surgery, better outcomes among patients most appropriate for surgery, and worse outcomes among patients least appropriate for surgery. We find strong empirical support for these and other predictions of the model, and decisively reject alternative explanations commonly proposed to explain geographic variation in medical care.
Keywords: No keywords provided
JEL Codes: I1; J0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| intensive treatment (I12) | survival outcomes (C41) |
| high-intensity areas (R14) | survival outcomes for appropriate patients (C41) |
| intensive treatment (I12) | worse outcomes for less appropriate patients (I14) |
| treatment intensity (C32) | productivity spillovers (O49) |
| intensity of surgical treatment (I11) | quality of non-intensive medical management (I11) |