IDEAS home Printed from https://ideas.repec.org/a/aiy/jnjaer/v23y2024i1p33-58.html
   My bibliography  Save this article

Empirical Testing of Grossman’s the Demand for Health Model: The Case of Russia

Author

Listed:
  • Olga N. Volkova
  • Aleksandra N. Volkova

Abstract

Healthcare services constitute one of the most important markets as they are used by all people regardless of age, wealth, and worldview. In order to effectively manage both private and public healthcare systems and to expand the scope of services provided in a timely manner, it is necessary to understand the nature of the demand for health, depending on the development of society and individuals. This paper is devoted to the empirical testing of one of the most influential models of health economics – Michael Grossman’s model of health demand – by means of econometrical modelling. We used data from RLMS HSE (Russia Longitudinal Monitoring Survey of HSE) for 2019 and 2020. The paper tested the hypotheses that educational level positively affects the demand for health, that women invest in their health more responsibly than men, that the “age”- “demand for health” link has non-linear character, and the rate of health amortization is not constant during the life of an individual. We concluded that health demonstrates the features of both consumption and investment good. It was also found that income affects the demand for health just within the consumption interpretation of this construct, not within the investment one. The study showed that people with a low income tend to consume medical services more actively by spending more time in hospitals. It can be assumed that demand for medical services will increase during the economic crisis, job cuts, inflation, and a drop in real incomes of the population. The results of the study may help to predict the demand and consumption of medical services and to facilitate decision-making in Russia's healthcare system in the future.

Suggested Citation

  • Olga N. Volkova & Aleksandra N. Volkova, 2024. "Empirical Testing of Grossman’s the Demand for Health Model: The Case of Russia," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 23(1), pages 33-58.
    • Handle: RePEc:aiy:jnjaer:v:23:y:2024:i:1:p:33-58
    DOI: https://doi.org/10.15826/vestnik.2024.23.1.002
    as

    Download full text from publisher

    File URL: https://journalaer.ru//fileadmin/user_upload/site_15934/2024/02_Volkova_Volkova.pdf
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.15826/vestnik.2024.23.1.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Evguenii A. Zazdravnykh & Andrey V. Aistov & Ekaterina A. Aleksandrova, 2021. "Total expenditure elasticity of healthcare spending in Russia," Russian Journal of Economics, ARPHA Platform, vol. 7(4), pages 326-353, December.
    2. Giorgio Brunello & Margherita Fort & Nicole Schneeweis & Rudolf Winter‐Ebmer, 2016. "The Causal Effect of Education on Health: What is the Role of Health Behaviors?," Health Economics, John Wiley & Sons, Ltd., vol. 25(3), pages 314-336, March.
    3. Victor R. Fuchs, 2018. "Reflections on the Socio-Economic Correlates of Health," World Scientific Book Chapters, in: Health Economics and Policy Selected Writings by Victor Fuchs, chapter 10, pages 115-124, World Scientific Publishing Co. Pte. Ltd..
    4. Manfred Erbsland & Walter Ried & Volker Ulrich, 1995. "Health, health care, and the environment. Econometric evidence from German micro data," Health Economics, John Wiley & Sons, Ltd., vol. 4(3), pages 169-182, May.
    5. Gerdtham, Ulf-G. & Johannesson, Magnus, 1999. "New estimates of the demand for health: results based on a categorical health measure and Swedish micro data," Social Science & Medicine, Elsevier, vol. 49(10), pages 1325-1332, November.
    6. Cutler, David M. & Lleras-Muney, Adriana, 2010. "Understanding differences in health behaviors by education," Journal of Health Economics, Elsevier, vol. 29(1), pages 1-28, January.
    7. Bhashkar Mazumder, 2008. "Does education improve health? A reexamination of the evidence from compulsory schooling laws," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 32(Q II), pages 2-16.
    8. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    9. Leonid V Azarnert, 2020. "Health capital provision and human capital accumulation," Oxford Economic Papers, Oxford University Press, vol. 72(3), pages 633-650.
    10. Zajacova, Anna & Siddiqi, Arjumand, 2022. "A comparison of health and socioeconomic gradients in health between the United States and Canada," Social Science & Medicine, Elsevier, vol. 306(C).
    11. Michael Grossman, 2022. "The demand for health turns 50: Reflections," Health Economics, John Wiley & Sons, Ltd., vol. 31(9), pages 1807-1822, September.
    12. Cropper, M L, 1977. "Health, Investment in Health, and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1273-1294, December.
    13. Leibowitz, Arleen A., 2004. "The demand for health and health concerns after 30 years," Journal of Health Economics, Elsevier, vol. 23(4), pages 663-671, July.
    14. Ponzo, Michela & Scoppa, Vincenzo, 2021. "Does demand for health services depend on cost-sharing? Evidence from Italy," Economic Modelling, Elsevier, vol. 103(C).
    15. Jochen Hartwig & Jan-Egbert Sturm, 2018. "Testing the Grossman model of medical spending determinants with macroeconomic panel data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1067-1086, November.
    16. Sultana, Tanzila & Dey, Sima Rani & Tareque, Mohammad, 2022. "Exploring the linkage between human capital and economic growth: A look at 141 developing and developed countries," Economic Systems, Elsevier, vol. 46(3).
    17. Sherry Glied & Adriana Lleras-Muney, 2003. "Health Inequality, Education and Medical Innovation," NBER Working Papers 9738, National Bureau of Economic Research, Inc.
    18. Emily Oster & Ira Shoulson & E. Ray Dorsey, 2013. "Limited Life Expectancy, Human Capital and Health Investments," American Economic Review, American Economic Association, vol. 103(5), pages 1977-2002, August.
    19. Grossman, Michael, 1982. "The demand for health after a decade," Journal of Health Economics, Elsevier, vol. 1(1), pages 1-3, May.
    20. Muurinen, Jaana-Marja, 1982. "Demand for health: A generalised Grossman model," Journal of Health Economics, Elsevier, vol. 1(1), pages 5-28, May.
    21. repec:pri:cheawb:adriana_healthinequality is not listed on IDEAS
    22. Adam Wagstaff, 1993. "The demand for health: An empirical reformulation of the Grossman model," Health Economics, John Wiley & Sons, Ltd., vol. 2(2), pages 189-198, July.
    23. Jason M. Fletcher & David E. Frisvold, 2009. "Higher Education and Health Investments: Does More Schooling Affect Preventive Health Care Use?," Journal of Human Capital, University of Chicago Press, vol. 3(2), pages 144-176.
    24. Peter Zweifel, 2012. "The Grossman model after 40 years," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(6), pages 677-682, December.
    25. Zhong Zhao, 2008. "Health demand and health determinants in China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(1), pages 77-98.
    26. Sherry Glied & Adriana Lleras-Muney, 2003. "Health Inequality, Education and Medical Innovation," Working Papers 255, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Galama, Titus & Kapteyn, Arie, 2011. "Grossman’s missing health threshold," Journal of Health Economics, Elsevier, vol. 30(5), pages 1044-1056.
    2. Titus J. Galama & Hans van Kippersluis, 2013. "Health Inequalities through the Lens of Health Capital Theory: Issues, Solutions, and Future Directions," Tinbergen Institute Discussion Papers 13-076/V, Tinbergen Institute.
    3. Burggraf, Christine, 2017. "Russian demand for dietary quality: Nutrition transition, diet quality measurement, and health investment theory," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 86, number 86.
    4. Burggraf, Christine, 2017. "Russian demand for dietary quality: Nutrition transition, diet quality measurement, and health investment theory," Studies on the Agricultural and Food Sector in Transition Economies 269539, Institute of Agricultural Development in Transition Economies (IAMO).
    5. Michael Grossman, 1999. "The Human Capital Model of the Demand for Health," NBER Working Papers 7078, National Bureau of Economic Research, Inc.
    6. repec:zbw:iamost:269539 is not listed on IDEAS
    7. Raquel Fonseca Benito & Yuhui Zheng, 2011. "The Effect of Education on Health Cross-Country Evidence," Working Papers WR-864, RAND Corporation.
    8. Bautista, María Angélica & González, Felipe & Martinez, Luis R. & Muñoz, Pablo & Prem, Mounu, 2020. "Does Higher Education Reduce Mortality? Evidence from a Natural Experiment in Chile," SocArXiv 5s2px, Center for Open Science.
    9. Tansel, Aysit & Karaoglan, Deniz, 2014. "Health behaviors and education in Turkey," MPRA Paper 57322, University Library of Munich, Germany, revised 15 Jul 2014.
    10. Titus J. Galama & Patrick Hullegie & Erik Meijer & Sarah Outcault, 2012. "Is There Empirical Evidence For Decreasing Returns To Scale In A Health Capital Model?," Health Economics, John Wiley & Sons, Ltd., vol. 21(9), pages 1080-1100, September.
    11. Liljas, Bengt, 1998. "The demand for health with uncertainty and insurance," Journal of Health Economics, Elsevier, vol. 17(2), pages 153-170, April.
    12. Gabriella Conti, 2013. "The Developmental Origins of Health Inequality," Research on Economic Inequality, in: Health and Inequality, volume 21, pages 285-309, Emerald Group Publishing Limited.
    13. Braakmann, Nils, 2011. "The causal relationship between education, health and health related behaviour: Evidence from a natural experiment in England," Journal of Health Economics, Elsevier, vol. 30(4), pages 753-763, July.
    14. Galama, Titus & Kapteyn, Arie, 2011. "Grossman’s missing health threshold," Journal of Health Economics, Elsevier, pages 1044-1056.
    15. Jochen Hartwig & Jan-Egbert Sturm, 2018. "Testing the Grossman model of medical spending determinants with macroeconomic panel data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1067-1086, November.
    16. Antonio Clavero Barranquero & Mª. Luz González Alvarez, 2005. "A survey of econometric models to analyze the demand and utilisation of health care," Hacienda Pública Española / Review of Public Economics, IEF, vol. 173(2), pages 129-162, June.
    17. Galama, T. & Hullegie, P. & Meijer, E. & Outcault, S., 2012. "Empirical evidence for decreasing returns to scale in a health capital model," Health, Econometrics and Data Group (HEDG) Working Papers 12/05, HEDG, c/o Department of Economics, University of York.
    18. Mallick, Debdulal & Khalil, Islam & Nicholas, Aaron, 2023. "Does Less Education Harm Health? Evidence from a Natural Experiment in a Developing Country," MPRA Paper 116184, University Library of Munich, Germany.
    19. Carbone, Jared C. & Kverndokk, Snorre, 2014. "Individual investments in education and health," HERO Online Working Paper Series 2014:1, University of Oslo, Health Economics Research Programme.
    20. Janke, Katharina & Johnston, David W. & Propper, Carol & Shields, Michael A., 2020. "The causal effect of education on chronic health conditions in the UK," Journal of Health Economics, Elsevier, vol. 70(C).
    21. Jared C. Carbone & Snorre Kverndokk, 2016. "Individual Investments in Education and Health: Policy Responses and Interactions," CESifo Working Paper Series 6154, CESifo.

    More about this item

    Keywords

    Grossman’s model; demand for health; health economics; Russia; healthcare system; RLMS HSE.;
    All these keywords.

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aiy:jnjaer:v:23:y:2024:i:1:p:33-58. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Natalia Starodubets (email available below). General contact details of provider: https://edirc.repec.org/data/seurfru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.