Working Paper: NBER ID: w26041
Authors: Richard J. Zeckhauser
Abstract: Ordeals are burdens placed on individuals that yield no direct benefits to others. They represent a dead-weight loss. Ordeals – the most common being waiting time – play a prominent role in health care. Their goal is to direct scarce resources to recipients receiving greater value from them, hence presumed to be more willing to bear an ordeal’s burden. Ordeals are intended to prevent wasteful expenditures given that health care is heavily subsidized, yet avoid other forms of rationing, such as quotas or pricing. This analysis diagnoses the economic underpinnings of ordeals. Subsidies to nursing home versus home care illustrate.
Keywords: ordeals; health care; resource allocation; deadweight loss
JEL Codes: H21; H24; I13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| waiting times (C41) | allocation of healthcare resources (I11) |
| waiting times (C41) | patient behavior (D10) |
| waiting times (C41) | access to care (I14) |
| ordeals (Y60) | wasteful expenditures (H59) |
| ordeals (Y60) | efficiency in resource allocation (D61) |
| deadweight loss from ordeals (H21) | efficiency in healthcare allocation (D61) |
| cost-effectiveness analysis (D61) | healthcare utilization (I11) |