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Unobserved heterogeneity and censoring in the demand for health care

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  • Angel López‐Nicolás

Abstract

In this paper we estimate a demand for private medical services equation based on the tradition of Grossman′s model of demand for health using data for a panel of Spanish households. The econometric specification accounts for the censored nature of the data, which arises from no participation and infrequency of purchases, and the existence of unobserved heterogeneity, which arises from the non‐observability of health states. Our evidence suggests that ignoring these features can have a significant impact on the size, sign and significance of the model estimates. The estimates for the participation and consumption processes also suggest that the deduction of expenditures on health care currently applicable in the Spanish tax system are positively associated to income and fertility. © 1998 John Wiley & Sons, Ltd.

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  • Angel López‐Nicolás, 1998. "Unobserved heterogeneity and censoring in the demand for health care," Health Economics, John Wiley & Sons, Ltd., vol. 7(5), pages 429-437, August.
    • Handle: RePEc:wly:hlthec:v:7:y:1998:i:5:p:429-437
    DOI: 10.1002/(SICI)1099-1050(199808)7:5<429::AID-HEC358>3.0.CO;2-U
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    References listed on IDEAS

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    6. Jones, Andrew M, 1989. "A Double-Hurdle Model of Cigarette Consumption," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(1), pages 23-39, Jan.-Mar..
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    Cited by:

    1. Markus Jochmann & Roberto León‐González, 2004. "Estimating the demand for health care with panel data: a semiparametric Bayesian approach," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 1003-1014, October.
    2. Ardeshir Sepehri & Sisira Sarma & Wayne Simpson, 2006. "Does non‐profit health insurance reduce financial burden? Evidence from the Vietnam living standards survey panel," Health Economics, John Wiley & Sons, Ltd., vol. 15(6), pages 603-616, June.
    3. 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.
    4. Marisol Rodríguez & Alexandrina Stoyanova, 2004. "The effect of private insurance access on the choice of GP/specialist and public/private provider in Spain," Health Economics, John Wiley & Sons, Ltd., vol. 13(7), pages 689-703, July.
    5. Angulo, Ana María & Barberán, Ramón & Egea, Pilar & Mur, Jesús, 2011. "An analysis of health expenditure on a microdata population basis," Economic Modelling, Elsevier, vol. 28(1), pages 169-180.

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