Table 4

Average marginal price effects on switching tiers

Tier 1Tier 2Tier 3Tier 4
Panel A. Net effects
Median Tier-1 price−0.8900.6400.2000.070
(0.012)(0.010)(0.003)(0.001)
Median Tier-2 price0.622−1.9430.8570.426
(0.010)(0.009)(0.008)(0.006)
Median Tier-3 price0.1980.866−1.5150.450
(0.003)(0.008)(0.013)(0.010)
Median Tier-4 price0.0710.4370.458−0.946
(0.001)(0.006)(0.010)(0.011)
Number of person-year observations8552855285528552
Share of observations in Tier k12.64%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−4.0500.1690.154
(0.056)(0.004)(0.005)
Median Tier-2 price2.775−0.5520.672
(0.048)(0.006)(0.016)
Median Tier-3 price0.8000.265−1.676
(0.028)(0.004)(0.019)
Median Tier-4 price0.4740.1180.850
(0.020)(0.003)(0.015)
Number of person-year observations123642062522
Share of observations starting in Tier k100.0%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.