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Medical Expenditure Puzzle

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  • Xiaoshu Han

Abstract

What does your medical expenditure do to your health? Researchers often get significant negative sign on the relative coefficient in the reduced form health production regression. The puzzling result motivates this simple dynamic quantitative general equilibrium model to study the relationships between health status, medical expenditure and employment. The structural parameters are estimated by an indirect inference procedure. This paper finds that the simulated coefficient of medical expenditure in the health equation is negative even though in the health evolution equation of the structural model, medical expenditure only impacts the health in the positive way

Suggested Citation

  • Xiaoshu Han, 2006. "Medical Expenditure Puzzle," 2006 Meeting Papers 284, Society for Economic Dynamics.
    • Handle: RePEc:red:sed006:284
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    medical expenditure; employment; dynamics; indirect inference;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General

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    This paper has been announced in the following NEP Reports:

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