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Health Insurance and the Demand for Medical Care: a Case Study from China

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  • Zi-Yi Guo

Abstract

Standard insurance theory expects that expenditures and coverage should be positively correlated, for two main reasons: first, high risky individuals prefer to choose a more generous coverage (selection effect); second, a more extensive coverage may increase health costs (incentive effect). We try to empirically separate the selection effect and incentive effect on the health care expenditures with a novel Chinese dataset. With our estimation, we do find the evidences of selection effect, but fail to find the incentive effect. Besides, we also find some evidences of Physician-Induced Demand.

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  • Zi-Yi Guo, 2017. "Health Insurance and the Demand for Medical Care: a Case Study from China," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 4(1), pages 8-13.
    • Handle: RePEc:aoj:ajeaer:v:4:y:2017:i:1:p:8-13:id:226
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