Abstract

(With Boris Kralj and Darrel Weinkauf)

Infectious diseases lower social welfare by distorting behavior of individuals. We exploit exogenous timing of the SARS outbreak in Ontario, Canada to examine the extent to which SARS distorted behavior of individuals in the market for medical services.  We find that SARS had negative temporary impact on utilization of medical services, but no long-lasting impact. About three quarters of the temporary SARS impact is explained by a decline in the visits of patients per physician, while the remaining quarter of the impact is due to changes in the intensity of medical treatment and in the mix of medical services.

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