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Estimating Price Elasticities of Convalescent Care Programmes

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  • NicolasR. Ziebarth

Abstract

This study is the first to estimate price elasticities of demand for convalescent care programmes. In 1997, the German legislature more than doubled the daily co-payments for the publicly insured from €6 to €13. The measure caused the overall demand for convalescent care treatments to fall by 20 to 25%. I estimate the price elasticity for medical rehabilitation programmes aimed at preventing work disability to be about - 0.3, whereas the elasticity for medical rehabilitation programmes for recovery from accidents at work lies around - 0.5. The demand for preventive treatment at health spas is elastic and less than - 1. Copyright © The Author(s). Journal compilation © Royal Economic Society 2010.

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 120 (2010)
Issue (Month): 545 (06)
Pages: 816-844

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Handle: RePEc:ecj:econjl:v:120:y:2010:i:545:p:816-844

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  1. Zweifel, Peter & Manning, Willard G., 2000. "Moral hazard and consumer incentives in health care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 8, pages 409-459 Elsevier.
  2. Chiappori, Pierre-Andre & Durand, Franck & Geoffard, Pierre-Yves, 1998. "Moral hazard and the demand for physician services: First lessons from a French natural experiment," European Economic Review, Elsevier, vol. 42(3-5), pages 499-511, May.
  3. Nicolas R. Ziebarth & Martin Karlsson, 2009. "A Natural Experiment on Sick Pay Cuts, Sickness Absence, and Labor Costs," SOEPpapers on Multidisciplinary Panel Data Research 244, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-77, June.
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  6. Stephen G. Donald & Kevin Lang, 2007. "Inference with Difference-in-Differences and Other Panel Data," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 221-233, May.
  7. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  8. David Bishai & Jody Sindelar, 2006. "Willingness to Pay for Drug Rehabilitation: Implications for Cost Recovery," NBER Working Papers 12506, National Bureau of Economic Research, Inc.
  9. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
  10. Meyer, Bruce D & Viscusi, W Kip & Durbin, David L, 1995. "Workers' Compensation and Injury Duration: Evidence from a Natural Experiment," American Economic Review, American Economic Association, vol. 85(3), pages 322-40, June.
  11. Puhani, Patrick A., 2008. "The Treatment Effect, the Cross Difference, and the Interaction Term in Nonlinear “Difference-in-Differences” Models," IZA Discussion Papers 3478, Institute for the Study of Labor (IZA).
  12. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  13. Bart COCKX & Carine BRASSEUR, 2001. "The Demand for Physician Services. Evidence from a Natural Experiment," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001027, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  14. Wedig, Gerard J., 1988. "Health status and the demand for health : Results on price elasticities," Journal of Health Economics, Elsevier, vol. 7(2), pages 151-163, June.
  15. Lee, ChoongSup, 1995. "Optimal medical treatment under asymmetric information," Journal of Health Economics, Elsevier, vol. 14(4), pages 419-441, October.
  16. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, vol. 93(2), pages 133-138, May.
  17. Keeler, Emmett B. & Manning, Willard G. & Wells, Kenneth B., 1988. "The demand for episodes of mental health services," Journal of Health Economics, Elsevier, vol. 7(4), pages 369-392, December.
  18. Partha Deb, 2001. "A discrete random effects probit model with application to the demand for preventive care," Health Economics, John Wiley & Sons, Ltd., vol. 10(5), pages 371-383.
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Cited by:
  1. Ziebarth N & Karlsson M, 2009. "The effects of expanding the generosity of the statutory sickness insurance system," Health, Econometrics and Data Group (HEDG) Working Papers 09/35, HEDG, c/o Department of Economics, University of York.
  2. Nicolas Ziebarth, 2014. "Assessing the effectiveness of health care cost containment measures: evidence from the market for rehabilitation care," International Journal of Health Care Finance and Economics, Springer, vol. 14(1), pages 41-67, March.

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