Social networks and health service utilization

While social networks have been examined in the context of many economic choices and outcomes, this study is the first to investigate the effects of social networks on health service utilization decisions. Networks can affect utilization decisions in many ways. They can provide information on institutional details of the health care system, and can reduce the search costs of locating an appropriate health care provider. Networks can even alter the demand for services by affecting the perceived efficacy or desirability of the available services. Using health service utilization decisions to study networks has two main advantages over work that studies other public programs. First, because health care in Canada is universal, there are no questions of eligibility. Second, by studying the different measures of utilization, it is possible to observe how the network effects vary across measures that reflect visits primarily instigated by the patient, to measures that reflect visits instigated by both patients and their physician. Using data from three cycles of the Canadian National Population Health Survey, this work exploits regional and language group variation to identify network effects. Strong and robust evidence of networks effects is found on the decision to utilize services reflecting initial contact with the health care system. As well, this work presents novel evidence that utilization of health services by immigrants increases with the number of doctors that speak their language in their neighborhood.