typically focus on a set of doctors under a common management scheme. Fewer studies relate the performance of speci fi c doctors to the incentives they face. While this may seem innocuous, recent contributions suggest that moral hazard in teams could lead to different results with institutional rather than personal incentives (Gaynor and others 2004).

Another part of the literature examines the link between competence and effort in high-income countries and shows that performance in vignettes is different from that in practice for a sample of 34 doctors in the Netherlands (Rethans and others 1991). However, given the sample size, they do not examine the complementarity (or lack thereof) between effort and competence or the impact of incentives on this gap. Closer to the results presented here on competence and effort is more recent work by Leonard and others (2005).<sup>5</sup> Leonard and others examine a similar problem in Tanzania and obtain similar results. A detailed discussion is postponed for later.

The remainder of the paper describes the health care environment in urban India, how the data were collected and how measures of competence and effort were constructed. It also presents descriptive statistics for these variables in both the public and private sectors (Section 2). Section 3 presents a simple model (and discusses some variants) that could help explain the more salient features of the descriptive statistics. Sections 4 and 5 present an empirical strategy and regression analysis of the determinants of effort. We suggest interpretations of the coefficients given the associated identi fi cation problems. Section 6 offers a short, tentative policy discussion and a discussion of further research.

# 2 The Environment, Data Collection and Description

## 2.1 The Environment

India is a low-income country and one-third of its population of 1.2 billion lives in urban centers. The capital of the country, Delhi, is a teeming metropolis with over 14 million inhabitants and covers a 1,400 sq. km area. Delhi is rich compared to the rest of the country–in 1995-96, the average per capita income in Delhi at almost Rs. 20,000 was twice as high as the rest of the country. Because Delhi is the capital and one of the richest regions in the country, the availability of health care is no longer an issue. Every household can chose from 80 practitioners within a 15-minute walking radius. The average household visits a doctor once every two weeks. Furthermore, the poor visit doctors more than the rich (Das and Sánchez 2004).

Health care in Delhi (and the rest of the country) is provided through a public health system that consists of hospitals and fi rst responder Primary Health Care Centers (PHCs), and a larger number of private providers. Quali fi cations in the private sector are bewildering. Training periods can range from 6 months to 6 years. For this study, practitioner quali fi cations are grouped by whether the practitioner holds

> 5 Our work, along with Leonard and others (2005) and Barber and Gertler (2005) are the fi rst to measure the quality of health care using vignettes in low-income countries. In many demand studies, the "quality" of a health clinic is measured by the presence or absence of pharmaceuticals in stock or other easily observed physical characteristics of the facility (Collier and others 2003), which are better measures of subsidies, rather than medical care, if public facilities give drugs for free. An accurate diagnosis and prescription can be taken to a pharmacist for fi lling. What is not measured, but what is both part of the intuition that quality matters and the part of that is speci fi c to the facility, is the accuracy of diagnosis and the appropriateness of treatment

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