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Elasticities of market shares and social health insurance choice in germany: a dynamic panel data approach

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Author Info

  • Marcus Tamm
  • Harald Tauchmann

    (RWI Essen, Essen, Germany)

  • Jürgen Wasem

    (Institute of Health Care Management, University of Duisburg|Essen, Essen, Germany)

  • Stefan Gre�

    (Institute of Health Care Management, University of Duisburg|Essen, Essen, Germany)

Abstract

In 1996, free choice of health insurers was introduced to the German social health insurance system. One objective was to increase efficiency through competition. A crucial precondition for effective competition among health insurers is that consumers search for lower-priced health insurers. We test this hypothesis by estimating the price elasticities of insurers' market shares. We use unique panel data and specify a dynamic panel model to explain changes in market shares. Estimation results suggest that short-run price elasticities are smaller than previously found by other studies. In the long-run, however, estimation results suggest substantial price effects. Copyright © 2006 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1167
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Bibliographic Info

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

Volume (Year): 16 (2007)
Issue (Month): 3 ()
Pages: 243-256

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Handle: RePEc:wly:hlthec:v:16:y:2007:i:3:p:243-256

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

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References

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  1. Robert Nuscheler & Thomas Knaus, 2005. "Risk selection in the German public health insurance system," Health Economics, John Wiley & Sons, Ltd., vol. 14(12), pages 1253-1271.
  2. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
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  4. Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  5. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
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  7. Schut, Frederik T. & Hassink, Wolter H. J., 2002. "Managed competition and consumer price sensitivity in social health insurance," Journal of Health Economics, Elsevier, vol. 21(6), pages 1009-1029, November.
  8. Scanlon, Dennis P. & Chernew, Michael & McLaughlin, Catherine & Solon, Gary, 2002. "The impact of health plan report cards on managed care enrollment," Journal of Health Economics, Elsevier, vol. 21(1), pages 19-41, January.
  9. Gre[ss], Stefan & Groenewegen, Peter & Kerssens, Jan & Braun, Bernard & Wasem, Juergen, 2002. "Free choice of sickness funds in regulated competition: evidence from Germany and The Netherlands," Health Policy, Elsevier, vol. 60(3), pages 235-254, June.
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  11. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
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  14. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
  15. Gre[ss], Stefan & Focke, Axel & Hessel, Franz & Wasem, Jurgen, 2006. "Financial incentives for disease management programmes and integrated care in German social health insurance," Health Policy, Elsevier, vol. 78(2-3), pages 295-305, October.
  16. Roger Feldman & Michael Finch & Bryan Dowd & Steven Cassou, 1989. "The Demand for Employment-Based Health Insurance Plans," Journal of Human Resources, University of Wisconsin Press, vol. 24(1), pages 115-142.
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Citations

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Cited by:
  1. Perugini, Cristiano & Hölscher, Jens & Collie, Simon, 2013. "Inequality, credit expansion and financial crises," MPRA Paper 51336, University Library of Munich, Germany.
  2. Schmitz, Hendrik & Ziebarth, Nicolas R., 2011. "In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of Health Plan Choice," IZA Discussion Papers 6241, Institute for the Study of Labor (IZA).
  3. Dormont, Brigitte & Geoffard, Pierre-Yves & Lamiraud, Karine, 2009. "The influence of supplementary health insurance on switching behaviour : evidence from Swiss data," Economics Papers from University Paris Dauphine 123456789/1623, Paris Dauphine University.
  4. Martin Gaynor & Robert J. Town, 2011. "Competition in Health Care Markets," NBER Working Papers 17208, National Bureau of Economic Research, Inc.
  5. Brigitte Dormont & Pierre-Yves Geoffard & Karine Lamiraud, 2007. "The influence of supplementary health insurance on switching behaviour: evidence on Swiss data," Working Papers halshs-00587785, HAL.
  6. Janet Vroomen & Peter Zweifel, 2011. "Preferences for health insurance and health status: does it matter whether you are Dutch or German?," The European Journal of Health Economics, Springer, vol. 12(1), pages 87-95, February.
  7. Normann Lorenz, 2013. "Adverse selection and risk adjustment under imperfect competition," Research Papers in Economics 2013-05, University of Trier, Department of Economics.
  8. Brigitte Dormont & Pierre-Yves Geoffard & Karine Lamiraud, 2007. "The influence of supplementary health insurance on switching behaviour : evidence on Swiss data," Working Papers 0702, University of Lausanne, Institute of Health Economics and Management (IEMS).
  9. Boris Augurzky & Harald Tauchmann, 2008. "Less Social Health Insurance – More Private Supplementary Insurance? – Empirical Evidence from Germany," Ruhr Economic Papers 0046, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  10. Boris Augurzky & Thomas Bauer & Sandra Schaffner, 2006. "Copayments in the German Health System – Do They Work?," RWI Discussion Papers 0043, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
  11. Boris Augurzky & Dirk Engel & Christoph M. Schmidt & Christoph Schwierz, 2009. "Ownership and Financial Performance in the German Hospital Sector," Ruhr Economic Papers 0123, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  12. Rudy Douven & Marco Ligthart & H. Lieverdink & I. Vermeulen, 2007. "Measuring annual price elasticities in Dutch health insurance; a new method," CPB Discussion Paper 90, CPB Netherlands Bureau for Economic Policy Analysis.
  13. Dormont, Brigitte & Geoffard, Pierre-Yves & Lamiraud, Karine, 2013. "Assurance maladie en Suisse : les assurances supplémentaires nuisent-elles à la concurrence sur l'assurance de base ?," Economics Papers from University Paris Dauphine 123456789/11294, Paris Dauphine University.
  14. Hendrik Schmitz & Nicolas R. Ziebarth, 2011. "In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of," Ruhr Economic Papers 0304, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  15. David Aristei & Cristiano Perugini, 2011. "Speed and Sequencing of Transition Reforms and Income Inequality: a Panel Data Analysis," Working Papers 302, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  16. Augurzky, Boris & Bauer, Thomas K. & Schaffner, Sandra, 2006. "Copayments in the German Health System: Does It Work?," IZA Discussion Papers 2290, Institute for the Study of Labor (IZA).

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