We use simple economic insights to develop a framework for distinguishing between prejudice and statistical discrimination using observational data. We focus our inquiry on the enormous literature in healthcare where treatment disparities by race and gender are not explained by access,...

Greater patient cost-sharing could help reduce the fiscal pressures associated with insurance expansion by reducing the scope for moral hazard. But it is possible that low-income recipients are unable to cut back on utilization wisely and that, as a result, higher cost-sharing will lead to worse...

The conventional wisdom in health economics is that idiosyncratic features of the healthcare sector leave little scope for market forces to allocate consumers to higher performance producers. However, we find robust evidence across a variety of conditions and performance measures that higher...

In medicine, the reasons for variation in treatment rates across hospitals serving similar patients are not well understood. Some interpret this variation as unwarranted, and push standardization of care as a way of reducing allocative inefficiency. An alternative interpretation is that...

Precision medicines – therapies that rely on the use of genetic, epigenetic, and protein biomarkers – create a better match between patients with specific disease subtypes and medications that are more effective for those patients. This heterogeneity in response has implications for the...