Class 6: Basics of Hospital Pricing

In this module, we’ll introduce the idea of “selection on observables” and the different ways to exploit that idea to make casual statements. We’ll do this in the context of hospital pricing, the research question being whether and to what extent hospitals receiving a financial penalty also raise their prices.


Angrist, J., and J. Pischke. 2009. Mostly Harmless Econometrics. Princeton, NJ: Princeton University Press.
Cooper, Zack, Stuart V Craig, Martin Gaynor, and John Van Reenen. 2019. “The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured.” Quarterly Journal of Economics 134 (1): 51–107.
Darden, Michael, Ian McCarthy, and Eric Barrette. 2018. “Who Pays in Pay-for-Performance? Evidence from Hospital Pricing.” Working {Paper} w24304. National Bureau of Economic Research.