Duplicate coverage and demand for health care. The case of Catalonia

An erratum has been published for this article in Health Economics 9(3) 2000, 271. An individual has duplicate coverage when he enjoys a compulsory medical public insurance, and in addition he has purchased a private one. This paper studies the implications of duplicate coverage on both demand for visits to specialists and on the selection process of the private insurance market. Econometric models, estimated by the generalized method of moments, accommodate both the endogeneity of insurance choice decision and the non‐negativity of the variable number of visits. The choice of instrumental variables is motivated within a theoretical model of demand for health care. The results shows that endogeneity is important for the subsample of heads of household, but not for the subsample of non‐heads of household. For the subsample of non‐heads of household, a positive effect of duplicate coverage on the number of visits to specialists is found. Health related variables, education and income are also important. Results are consistent with the idea that heads of household that buy private insurance are the ones with poor unobservable health conditions. It is argued that this last result is related to the existence of a compulsory public insurance. Copyright © 1999 John Wiley & Sons, Ltd.