Competition, equity and quality in public services

Competition, equity and quality in public services

This paper examines the implications of consumer heterogeneity for the choice of competition and monopoly in public services delivery. In a setting with motivated providers who favour one type of service user over another, we show that competition can raise average quality. However, this may be at t...

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Bibliographic Details
Published in:European economic review Vol. 164; p. 104719
Main Authors: Halonen-Akatwijuka, Maija, Propper, Carol
Format: Journal Article
Language:English
Published: Elsevier B.V 01-05-2024
Subjects:
Competition
Inequity aversion
Public services
Quality
Competition
Inequity aversion
Quality
I11
H11
I24
Public services
L31
I14
Online Access:Get full text
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Description
Summary:This paper examines the implications of consumer heterogeneity for the choice of competition and monopoly in public services delivery. In a setting with motivated providers who favour one type of service user over another, we show that competition can raise average quality. However, this may be at the expense of the minority type of user if the providers favour the majority type. Then an inequity averse regulator may protect the minority by not introducing competition. Alternatively, if the providers favour the minority type, the regulator may introduce competition to incentivize the providers to pay attention to the less rewarding majority type.
ISSN:0014-2921
1873-572X
DOI:10.1016/j.euroecorev.2024.104719