Do red herrings swim in circles? Controlling for the endogeneity of time to death
AbstractStudies on the effect of ageing on health care expenditure (HCE) have revealed the importance of controlling for time-to-death (TTD). These studies, however, are subject to possible endogeneity if HCE influences the remaining life expectancy. This paper introduces a 10-year observation period on monthly HCE, socioeconomic characteristics and survivor status to first predict TTD and then use the predicted values as an instrument in the regression for HCE. While exogeneity of TTD has to be rejected, core results concerning the role of TTD rather than age as a determinant of HCE (the 'red herring' hypothesis) are confirmed.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Health Economics.
Volume (Year): 29 (2010)
Issue (Month): 2 (March)
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Web page: http://www.elsevier.com/locate/inca/505560
Health care expenditure Proximity to death Ageing 'Red herring' hypothesis;
Other versions of this item:
- Stefan Felder & Andreas Werblow & Peter Zweifel, 2008. "Do Red Herrings Swim in Circles? – Controlling for the Endogeneity of Time to Death," Ruhr Economic Papers 0073, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- I10 - Health, Education, and Welfare - - Health - - - General
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
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