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Estimates of the Demand for Medical Care under Different Functional Forms

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  • Hunt-McCool, Janet
  • Kiker, B F
  • Ng, Ying Chu

Abstract

We estimate price and income elasticities from a linear, log-linear, and the almost ideal demand model (with and without an adjustment for selectivity bias) in an effort to show that special attention should be paid to the underlying assumptions of consumer behaviour when estimating a medical care demand model. The literature on medical care utilization is extended by incorporating two major components of spending as separate demands in a system of medical care spending. We find that estimates of elasticities vary depending on the functional form of the estimating equation, thus questioning the usefulness for policy purposes of single estimates of elasticities. Copyright 1994 by John Wiley & Sons, Ltd.

Suggested Citation

  • Hunt-McCool, Janet & Kiker, B F & Ng, Ying Chu, 1994. "Estimates of the Demand for Medical Care under Different Functional Forms," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(2), pages 201-218, April-Jun.
    • Handle: RePEc:jae:japmet:v:9:y:1994:i:2:p:201-18
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    Cited by:

    1. Shinn‐Shyr Wang & Kyle W. Stiegert & Tirtha P. Dhar, 2010. "Strategic Pricing Behavior under Asset Value Maximization," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(2), pages 151-170, June.
    2. van Campen, Cretien & Woittiez, Isolde B., 2003. "Client demands and the allocation of home care in the Netherlands. A multinomial logit model of client types, care needs and referrals," Health Policy, Elsevier, vol. 64(2), pages 229-241, May.
    3. Ian J. Irvine & William A. Sims, 2002. "A simple and efficient method for estimating the magnitude and precision of welfare changes: comment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 17(1), pages 81-83.
    4. Partha Deb & Ann M. Holmes, 1998. "Substitution of physicians and other providers in outpatient mental health care," Health Economics, John Wiley & Sons, Ltd., vol. 7(4), pages 347-361, June.
    5. Anikó Bíró, 2014. "Supplementary private health insurance and health care utilization of people aged 50+," Empirical Economics, Springer, vol. 46(2), pages 501-524, March.
    6. Thompson Alexi & Koichi Yamaura, 2017. "Does Previous Marijuana Use Increase the Use of Other Drugs: An Almost Ideal Demand System Approach," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(3), pages 1-6, July.
    7. Atella, Vincenzo, 2000. "Drug cost containment policies in Italy: are they really effective in the long-run?: The case of minimum reference price," Health Policy, Elsevier, vol. 50(3), pages 197-218, January.
    8. Filippini, Massimo & Masiero, Giuliano & Moschetti, Karine, 2006. "Socioeconomic determinants of regional differences in outpatient antibiotic consumption: Evidence from Switzerland," Health Policy, Elsevier, vol. 78(1), pages 77-92, August.
    9. Massimo Filippini & Giuliano Masiero & Karine Moschetti, 2008. "Dispensing practices and antibiotic use," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 0808, USI Università della Svizzera italiana.
    10. Giuliano Masiero & Massimo Filippini & Matus Ferech & Herman Goossens, 2007. "Determinants of outpatient antibiotic consumption in Europe: bacterial resistance and drug prescribers," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 0702, USI Università della Svizzera italiana.
    11. Jofre-Bonet, Mireia & Petry, Nancy M., 2008. "Trading apples for oranges?: Results of an experiment on the effects of Heroin and Cocaine price changes on addicts' polydrug use," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 281-311, May.
    12. Susan H. Busch & Mireia Jofre-Bonet & Tracy A. Falba & Jody L. Sindelar, 2004. "Tobacco Spending and its Crowd-Out of Other Goods," NBER Working Papers 10974, National Bureau of Economic Research, Inc.
    13. Sepehri, Ardeshir & Simpson, Wayne & Sarma, Sisira, 2006. "The influence of health insurance on hospital admission and length of stay--The case of Vietnam," Social Science & Medicine, Elsevier, vol. 63(7), pages 1757-1770, October.
    14. Massimo Filippini & Giuliano Masiero & Karine Moschetti, 2009. "Physician dispensing and antibiotic prescriptions," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 0908, USI Università della Svizzera italiana.
    15. Giuliano Masiero & Massimo Filippini & Matus Ferech & Herman Goossens, 2010. "Socioeconomic determinants of outpatient antibiotic use in Europe," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 55(5), pages 469-478, October.
    16. Charles Mulindabigwi Ruhara & Josue Mbonigaba, 2016. "The Role of Economic Factors in the Choice of Medical Providers in Rwanda," Journal of Economics and Behavioral Studies, AMH International, vol. 8(2), pages 65-78.
    17. Wang, Shinn-Shyr & Stiegert, Kyle W. & Dhar, Tirtha Pratim, 2006. "Strategic Pricing Behavior under Asset Value Maximization," Staff Papers 12612, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.

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