Two Inefficiencies of Self-Selection: Evidence from Health Care

Speaker:  Toshiaki Iizuka - University of Tokyo
  Thursday, October 9, 2025 at 12:00 PM Aula Vaona
Self-selection into social programs can lead to socially excessive or insufficient participation. We propose a framework to detect and address these inefficiencies, applying it to diabetes care, where individuals above a biomarker threshold receive nudges to seek care. Crossing the threshold increases healthcare utilization and improves health outcomes. However, those who opt into care—both compliers and beyond-compliers—are generally healthier and benefit less, indicating reverse selection on gains. Targeting based on observable characteristics reduces excessive participation and improves welfare, while outreach to individuals reluctant to seek care despite high potential benefits mitigates insufficient participation and may further raise welfare.
 

Programme Director
Paola Bertoli

External reference
Publication date
August 1, 2025

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