Betting on Your Health: The Role of Uncertainty in Physician Decision-Making

This paper considers the role of uncertainty in physician decision-making, focusing on the labor and delivery setting. Specifically, the analysis tests whether differential variance in expected outcomes between vaginal and C-section delivery explains observed treatment choices, controlling for the differential mean in expected outcomes. The empirical procedure uses machine learning methods to obtain precise estimates of the mean and variance in outcomes under each treatment option conditional on a high-dimensional set of patient characteristics. An instrumental variables strategy is employed to obtain causal parameters.