Incentive effects in the demand for health care: a bivariate panel count data estimation

Andreas Million, Regina Riphahn and Achim Wambach

Journal of Applied Econometrics, 2003, vol. 18, issue 4, 387-405

Abstract: This paper contributes in three dimensions to the literature on health care demand. First, it features the first application of a bivariate random effects estimator in a count data setting, to permit the efficient estimation of this type of model with panel data. Second, it provides an innovative test of adverse selection and confirms that high-risk individuals are more likely to acquire supplemental add-on insurance. Third, the estimations yield that in accordance with the theory of moral hazard, we observe a much lower frequency of doctor visits among the self-employed, and among mothers of small children. Copyright © 2002 John Wiley & Sons, Ltd.

Date: 2003
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DOI: 10.1002/jae.680

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