Finance Webinar（2023- 03）
Topic : Access to Credit and Medical Decisions: Can Finance Save Lives?
Speaker: Janghoon Shon, The Hong Kong University of Science and Technology
Time: Friday, January 13, 10:00 - 11: 30, a.m. Beijing Time
Location: Zoom Online Conference Room
Abstract
The poor often delay seeking medical treatment, even when it is free, to avoid losing income due to missed workdays. I use a regression discontinuity design to show that access to credit can remedy this issue. I exploit a setting in Korea in which individuals below a certain income threshold are eligible for cheap credit. My main finding is that such individuals have a 70% lower 1-year mortality rate than otherwise similar individuals who are ineligible for cheap credit. One-third of this reduction is due to the fact that the eligible individuals see a doctor more promptly than the ineligible individuals after the onset of disease symptoms, as reflected in a lower likelihood of emergency room visits. Another forty percent comes from these individuals starting treatment on average 62 days earlier following their initial diagnosis. A further major determinant of the decline in mortality is that eligible individuals with chronic diseases are more likely to visit clinics for regular treatment. I explicitly show that such differences in the timeliness of treatment are due to individuals with access to credit being 44% more likely to take time off from work to seek medical care. Overall, access to credit can make a life-or-death difference to the poor even when medical treatment is affordable.
Biography
Janghoon Shon is a Ph.D. candidate at the Hong Kong University of Science and Technology. Shon’s research interests are in household finance, alternative data, labor and finance, financial analysts’ behaviors, and innovation. His research papers have been published in the Journal of Financial Economics, Journal of Corporate Finance, Economics Letters, and Research Policy.
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