Hi there!
I'm Wei Xiong (熊维), a Ph.D. candidate in Economics at the Pontifical Catholic University of Chile (PUC-Chile). I study health and environment-related markets to address pressing public health concerns. My job market paper uses theoretical and empirical tools of industrial organization to shed light on our way toward universal health coverage.
Starting July 2024, I will join Universidad de los Andes (Chile) as an assistant professor in Economics.
Email: wxiong@uc.cl | Link to my CV
Abstract. This paper examines how the selection outcome of health insurance affects the hospital market. Consumers choose different insurance plans according to their preferences, giving rise to heterogeneity in vertical coverage levels and tiered coverage contingent on hospital choice. Hospitals are differentiated in both vertical (e.g., quality) and horizontal (e.g., distance) dimensions. Better-insured patients are more likely to choose hospitals that are perceived as of higher quality (i.e., ``star" hospitals), elevating star hospitals' markups. Insurers ``cream-skim" consumers who are less likely to go to star hospitals by offering tiered network plans, which place expensive hospitals on a non-preferred tier with less coverage. Hospital tiering may appear to mitigate ``moral hazard" in hospital choice and constrain hospital price dispersion. However, lower coverage at star hospitals can weaken insurers' bargaining incentives with these hospitals and thus enlarge hospital price dispersion. I empirically evaluate the countervailing forces using market-wide claims data from Chile and find that tiered coverage widens hospital price dispersion, hurts star hospitals' profitability and harms patients' welfare. My results provide new evidence of the negative equilibrium effects of heterogeneous insurance coverage on the hospital market.
Work in Progress
Paying for private healthcare: Patient selection and (mis)allocation of medical resources
Summary. This paper studies how paying for private healthcare influences patient selection and its implications for the allocation of medical resources. I provide evidence that the large mortality difference between public and private hospitals in Chile is driven by negative patient sorting on sickness. I propose a model of patient selection in the health services market and clinician selection in the labor market. Out-of-pocket coinsurance on a convex cost curve results in more experienced clinicians treating patients with less severe conditions in the private sector. The expansion of public insurance not only attenuates patient selection but also improves the allocative efficiency of medical professionals.
Pricing Water under Scarcity and Adverse Selection: Theory and Evidence (with Juan-Pablo Montero)
Summary. We confirm an emerging empirical observation that utility consumers respond to average price rather than marginal price. Given the average price bias, we derive optimal block price schedules under water scarcity. We estimate the key parameters using detailed administrative data that spans ten years and covers every household in the Metropolitan region of Santiago, Chile.
Overdue Water Bills and Optimal Enforcement (with Juan-Pablo Montero and Catalina San Cristobal)
Summary. Interruption of utility services was suspended during the COVID-19 pandemic with the intention to ensure basic services for households under financial distress. However, we find that it was primarily higher-income households that accumulated sizable overdue water bills. Facing enforcement costs, we use our quasi-experimental estimations to derive the optimal interruption strategy of water utilities that balances financial viability and water conservation.