Table 4.
Average marginal price effects on switching tiers
| Tier 1 | Tier 2 | Tier 3 | Tier 4 | |
|---|---|---|---|---|
| Panel A. Net effects | ||||
| Median Tier-1 price | –0.890 (0.012) | 0.640 (0.010) | 0.200 (0.003) | 0.070 (0.001) |
| Median Tier-2 price | 0.622 (0.010) | –1.943 (0.009) | 0.857 (0.008) | 0.426 (0.006) |
| Median Tier-3 price | 0.198 (0.003) | 0.866 (0.008) | –1.515 (0.013) | 0.450 (0.010) |
| Median Tier-4 price | 0.071 (0.001) | 0.437 (0.006) | 0.458 (0.010) | –0.946 (0.011) |
| Number of person-year observations | 8552 | 8552 | 8552 | 8552 |
| Share of observations in Tier k | 12.64% | 44.68% | 28.70% | 13.99% |
| % change in share choosing Tier k, implied by net own-price effect | –7.04% | –4.35% | –5.28% | –6.76% |
| Panel B. Gross effects | ||||
| Median Tier-1 price | –4.050 (0.056) | 0.169 (0.004) | 0.154 (0.005) | – |
| Median Tier-2 price | 2.775 (0.048) | –0.552 (0.006) | 0.672 (0.016) | – |
| Median Tier-3 price | 0.800 (0.028) | 0.265 (0.004) | –1.676 (0.019) | – |
| Median Tier-4 price | 0.474 (0.020) | 0.118 (0.003) | 0.850 (0.015) | – |
| Number of person-year observations | 1236 | 4206 | 2522 | – |
| Share of observations starting in Tier k | 100.0% | 100.0% | 100.0% | – |
| % change in share choosing Tier k, implied by gross own-price effect | –4.05% | –0.55% | –1.68% | – |
Average marginal price effects, reported as percentage points, are calculated from the conditional logit regression in Table 3. For each Tier k=(1, 2, 3, 4), bolded numbers denote the effect of median Tier-k price on the probability of choosing that same Tier k (ie, the own-price effect), and unbolded numbers indicate the cross-effect of median Tier-k price on the probability of choosing Tier j ≠ k (ie, the cross-price effect). Standard errors bootstrapped with 1000 repetitions are in parentheses. Net effects in Panel A, calculated on the full sample, capture the combination of movement into and out of a tier. Gross effects in Panel B, calculated for those starting in each given tier, capture movement out of a tier. The regression for the Tier-4 gross effects failed to converge due to a small sample.