Income Distribution and the Public-Private Mix in Health Care Provision: The Latin American Case

Recent literature on Latin American countries shows that private expenses as a share of the total expenditures in health tend to be higher the lower the nation's level of economic development. This paper considers a discrete choice model of product differentiation, where consumer choice is based on a price-quality tradeoff. Physicians are involved in a dual-job holding structure, working as agents in the official sector while they maximize profits in a fragmented private sector.