Papers by Catherine Schaumans
Daar de proefschriften in de reeks van de Faculteit Economie en Bedrijswetenschappen het persoonl... more Daar de proefschriften in de reeks van de Faculteit Economie en Bedrijswetenschappen het persoonlijk werk zijn van hun auteurs, zijn alleen deze laatsten daarvoor verantwoordelijk. made me look forward to coming to work and whose diverse perspectives on life helped me grow as a person. Last but not least, a special thank you is addressed to Kathryn, Mithun and Jack for giving my five freezing-cold months in Chicago a bit more warmth.
Essay 1: Entry and Regulation - Evidence from Health Care Professions Abstract: In many countries... more Essay 1: Entry and Regulation - Evidence from Health Care Professions Abstract: In many countries pharmacies receive high regulated markups and are protected from competition through geographic entry restrictions. We develop an empirical entry model for pharmacies and physicians with two features: entry restrictions and strategic complementarities. We find that the entry restrictions have directly reduced the number of pharmacies by more than 50%, and also indirectly reduced the number of physicians by about 7%. A removal of the entry restrictions, combined with a reduction in the regulated markups, would generate a large shift in rents to consumers, without reducing the availability of pharmacies. The public interest motivation for the current regime therefore has no empirical support. Essay 2: Supplier Inducement in the Belgian Primary Care Market Abstract: We perform an empirical exercise to address the presence of supplier-induced demand in the Belgian primary care market, which...
Health care professions in Europe have been subject to substantial entry and con& duct regulation... more Health care professions in Europe have been subject to substantial entry and con& duct regulation. We develop and estimate an entry model to study the competitive interaction between two key health care suppliers: pharmacies and physicians. The model accounts for the fact that there may not be free entry; geographic entry restric& tions apply to pharmacies.
We propose a methodology for estimating the competition effects from entry when firms sell differ... more We propose a methodology for estimating the competition effects from entry when firms sell differentiated products. We first derive precise conditions under which Bresnahan and Reiss' entry threshold ratios (ETRs) can be used to test for the presence and to measure the magnitude of competition effects. We then show how to augment the traditional entry model with a revenue equation. This revenue equation serves to adjust the ETRs by the extent of market expansion from entry, and leads to unbiased estimates of the competition effects ...
We propose a methodology for estimating the competition e¤ects from entry when …rms sell di¤erent... more We propose a methodology for estimating the competition e¤ects from entry when …rms sell di¤erentiated products. We …rst derive precise conditions under which Bresnahan and Reiss' entry threshold ratios (ETRs) can be used to test for the presence and to measure the magnitude of competition e¤ects. We then show how to augment the traditional entry model with a revenue equation. This revenue equation serves to adjust the ETRs by the extent of market expansion from entry, and leads to unbiased estimates of the competition e¤ects from entry. We apply our approach to seven di¤erent local service sectors. We …nd that entry typically leads to signi…cant market expansion, implying that traditional ETRs may substantially underestimate the competition e¤ects from entry. In most sectors, the second entrant reduces markups by at least 30%, whereas the third or subsequent entrants have smaller or insigni…cant e¤ects. In one sector, we …nd that even the second entrant does not reduce markups, consistent with a recent decision by the competition authority.
Background: General Practitioners have limited means to compete. As quality is hard to observe by... more Background: General Practitioners have limited means to compete. As quality is hard to observe by patients, GPs have incentives to signal quality by using instruments patients perceive as quality. Objectives: We investigate whether GPs exhibit different prescribing behavior (volume and value of prescriptions) when confronted with more competition. As there is no monetary benefit in doing so, this type of (perceived) quality competition originates from GPs satisfying patients' expectations. Method: We look at market level data on per capita and per contact number of items prescribed by GPs and the value of prescriptions for the Belgian market of General Practitioners. We test to which extent different types of variables explain the observed variation. We consider patient characteristics, GP characteristics, number and type of GP contacts and the level of competition. The level of competition is measured by GP density, after controlling for the number of GPs and a HHI. Results: We find that a higher number of GPs per capita results in a higher number of units prescribed by GPs, both per capita and per contact. We argue that this is consistent with quality competition in the GP market. Our findings reject alternative explanations of GP scarcity, availability effect in GP care consumption and GP dispersing prescription in time due to competition.
We propose a methodology for estimating the competition effects from entry when fiÂ…rms sell diffe... more We propose a methodology for estimating the competition effects from entry when fiÂ…rms sell differentiated products. We fiÂ…rst derive precise conditions under which Bresnahan and Reiss' Â’entry threshold ratios (ETRs) can be used to test for the presence and to measure the magnitude of competition effects. We then show how to augment the traditional entry model with a revenue equation. This revenue equation serves to adjust the ETRs by the extent of market expansion from entry, and leads to unbiased estimates of the competition effects from entry. We apply our approach to seven different local service sectors. We fiÂ…nd that entry typically leads to signifiÂ…cant market expansion, implying that traditional ETRs may substantially underestimate the competition effects from entry. In most sectors, the second entrant reduces markups by at least 30%, whereas the third or subsequent entrants have smaller or insigniÂ…cant effects. In one sector, we Â…find that even the second entrant does not reduce markups, consistent with a recent decision by the competition authority.
The RAND Journal of Economics, Jan 1, 2008
Leuven, KU Leuven, Faculteit Economie en …, Jan 1, 2008
Center for Economic Studies- …, Jan 1, 2008
Center for Economic Studies-Discussion papers, Jan 1, 2007
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In many countries, pharmacies receive high regulated markups and are protected from competition t... more In many countries, pharmacies receive high regulated markups and are protected from competition through geographic entry restrictions. We develop an empirical entry model for pharmacies and physicians with two features: entry restrictions and strategic complementarities. We find that the entry restrictions have directly reduced the number of pharmacies by more than 50%, and also indirectly reduced the number of physicians by about 7%. A removal of the entry restrictions, combined with a reduction in the regulated markups, would generate a large shift in rents to consumers, without reducing the availability of pharmacies. The public interest motivation for the current regime therefore has no empirical support.
The health care professions in Europe have been subject to substantial entry and conduct regulati... more The health care professions in Europe have been subject to substantial entry and conduct regulation. Most notably, pharmacies have frequently received high regulated markups over wholesale costs, and have been protected from additional competition through ...
repository.libis.kuleuven.be
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Papers by Catherine Schaumans