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A structural econometric model of family valuation and choice of employer-sponsored health insurance in the United States

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  • David J. Vanness

    (Division of Health Care Policy & Research, Mayo Clinic, Rochester, Minnesota, USA)

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    Abstract

    This paper estimates a fully structural unitary household model of employment and health insurance decisions for dual wage-earner families with children in the United States, using data from the 1987 National Medical Expenditure Survey. Families choose hours of work and the breakdown of compensation between cash wages and health insurance benefits for each wage earner in order to maximize expected utility under uncertain need for medical care. Heterogeneous demand for the employer-sponsored health insurance is thus generated directly from variations in health status and earning potential. The paper concludes by discussing the benefits of using structural models for simulating welfare effects of insurance reform relative to the costly assumptions that must be imposed for identification. Copyright © 2003 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.837
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 12 (2003)
    Issue (Month): 9 ()
    Pages: 771-790

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    Handle: RePEc:wly:hlthec:v:12:y:2003:i:9:p:771-790

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    1. Nyman, John A., 1999. "The value of health insurance: the access motive," Journal of Health Economics, Elsevier, vol. 18(2), pages 141-152, April.
    2. Holmer, Martin, 1984. "Tax policy and the demand for health insurance," Journal of Health Economics, Elsevier, vol. 3(3), pages 203-221, December.
    3. Browning, Martin & Francois Bourguignon & Pierre-Andre Chiappori & Valerie Lechene, 1994. "Income and Outcomes: A Structural Model of Intrahousehold Allocation," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1067-96, December.
    4. Marquis, M Susan & Holmer, Martin R, 1996. "Alternative Models of Choice under Uncertainty and Demand for Health Insurance," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 421-27, August.
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    Cited by:
    1. Wang, H. Holly & Rosenman, Robert, 2007. "Perceived need and actual demand for health insurance among rural Chinese residents," China Economic Review, Elsevier, vol. 18(4), pages 373-388.

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