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Using Simulation-based Inference with Panel Data in Health Economics

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  • Paul Contoyannis
  • Andrew M. Jones
  • Roberto Leon-Gonzalez

Abstract

Panel datasets provide a rich source of information for health economists, offering the scope to control for individual heterogeneity and to model the dynamics of individual behaviour. However the qualitative or categorical measures of outcome often used in health economics create special problems for estimating econometric models. Allowing a flexible specification of the autocorrelation induced by individual heterogeneity leads to models involving higher order integrals that cannot be handled by conventional numerical methods. The dramatic growth in computing power over recent years has been accompanied by the development of simulation-based estimators that solve this problem. This review uses binary choice models to show what can be done with conventional methods and how the range of models can be expanded by using simulation methods. Practical applications of the methods are illustrated using data on health from the British Household Panel Survey (BHPS).

Suggested Citation

  • Paul Contoyannis & Andrew M. Jones & Roberto Leon-Gonzalez, 2002. "Using Simulation-based Inference with Panel Data in Health Economics," Department of Economics Working Papers 2002-13, McMaster University.
    • Handle: RePEc:mcm:deptwp:2002-13
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    Cited by:

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    2. Timothy J. Halliday, 2008. "Heterogeneity, state dependence and health," Econometrics Journal, Royal Economic Society, vol. 11(3), pages 499-516, November.
    3. Salvatore Loprevite & Domenico Raucci & Daniela Rupo, 2020. "KPIs Reporting and Financial Performance in the Transition to Mandatory Disclosure: The Case of Italy," Sustainability, MDPI, vol. 12(12), pages 1-24, June.
    4. Shiko Maruyama, 2008. "Measuring the Welfare Effect of Entry in Differentiated Product Markets: The Case of Medicare HMOs," Discussion Papers 2008-01, School of Economics, The University of New South Wales.
    5. Keane, Michael, 2004. "Modeling Health Insurance Choice Using the Heterogeneous Logit Model," MPRA Paper 55203, University Library of Munich, Germany.

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