22(40)
6
Results
6.1
Main results
This section presents the results from the baseline estimation. The sample
used in the analysis contains clinics that have performed both the first-
stage service and the follow-on service during the same year. In addition
the sample is restricted to be balanced over time.
26
The estimation sample
differs, depending on what services are included in the analysis.
Table 4 gives the main results. The first column gives the pooled OLS
estimates of the baseline model (5) where the only included control
variable is a public clinic dummy. The results from the pooled OLS-
estimate, in column 1, suggest that a 1% increase in competition is
followed by a 0.0089% decrease in the price for ''Basic examination &
diagnostics'' relative to “Tooth extraction''. This estimate can be related to
the mean of clinics within 1 km, which is 22.6 for the estimation sample. An
increase in competition with one new clinic corresponds to a 4.4% increase
in the competition measure. Thus, one extra clinic within 1 km is followed
by an increase in the price difference between basic examinations and tooth
extractions with 0.0395% (
4.4x0.00899).
The point estimates does not change when adding clinic fixed effects
(column 2) and a time-dummy (column 3) capturing year specific shocks,
but precision is increased. The estimated effect of competition on prices
from the pooled OLS is thus not driven by unobserved heterogeneity across
clinics or year specific factors. However, this is not surprising, as the
differencing across service types, described in section 5, removes clinic
specific factors that are common to all services.
26
Including all clinics does not change the results qualitatively.
