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 heterogeneous insurance coverage with tiered hospital networks affects hospital prices. Hospitals are differentiated in both vertical and horizontal dimensions. Better-insured patients are more likely to choose hospitals that are perceived as of higher quality – a phenomenon that I label as “moral hazard in hospital choice”. Serving well-insured, price-insensitive patients elevates the markups of high-quality “star” hospitals. To save costs, insurers steer demand away from expensive star hospitals through tiered network plans that place high-priced hospitals in a non-preferred tier with less coverage and more cost-sharing. Tiered networks may appear to mitigate moral hazard in hospital choice and constrain hospital price dispersion. However, lower coverage at star hospitals weakens insurers’ bargaining incentives with these hospitals and enlarges hospital price dispersion. I empirically evaluate the countervailing forces using market-wide claims data from Chile and find that tiered networks widen hospital price dispersion, hurt star hospitals’ profitability and harm patients’ welfare. My results provide new evidence of the negative equilibrium effects of insurance coverage heterogeneity on the hospital market.
Work in Progress
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.
Public-Private Quality Disparity in Chilean Hospitals: How Large is the Gap? (with Alejandra Benitez)
Summary. We use capacity-based referrals to identify the quality gap between public and private hospitals in Chile. Our conceptual framework is based on the classic Roy's model of self-selection. Crude cross-hospital comparison of mortality involves patient selection in severity. Adjusting for patient selection with the quasi-experiment of referrals, we estimate the return of access to private hospitals and its cost-benefit.