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Heterogeneous effect of coinsurance rate on the demand for health care: a finite mixture approach

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  • Galina Besstremyannaya

    ()
    (CEFIR)

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    Abstract

    The paper exploits finite mixture (latent class) models to account for consumer heterogeneity in estimating the effect of coinsurance rate on the demand for health care. The parametric analysis employs a two-part model, a Tobit model, and generalized linear models with latent classes. The non-parametric analysis uses matching estimators in each latent class to construct a control group of consumers and measure the average treatment effect of the natural experiment with a rise in nominal coinsurance rate. The paper exploits the 2000-2008 data of the Japanese Panel Survey of Consumers and the 2008 data of Japan Household Panel Survey. The estimations demonstrate a significant negative effect of nominal coinsurance rate on the demand for health care. The effect is primarily noticeable in the latent class of consumers with high health care demand, who constitute 21% of the sample. Our finding with the latent class models with Japanese data, where the assignment of insurance plans is exogenous, is similar to the results with the RAND Health Insurance Experiment data, where the assignment was randomized.

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    File URL: http://www.cefir.ru/papers/WP163_2012.pdf
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    Bibliographic Info

    Paper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0163.

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    Length: 40 pages
    Date of creation: Oct 2012
    Date of revision:
    Handle: RePEc:cfr:cefirw:w0163

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    Related research

    Keywords: Health insurance; coinsurance rate; panel data latent class model; average treatment effect; price elasticity; matching estimators;

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    1. Abadie, Alberto & Imbens, Guido W., 2011. "Bias-Corrected Matching Estimators for Average Treatment Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(1), pages 1-11.
    2. Deb, Partha & Trivedi, Pravin K, 1997. "Demand for Medical Care by the Elderly: A Finite Mixture Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 313-36, May-June.
    3. Sergi Jiménez-Mart�n & José M. Labeaga & Maite Mart�nez-Granado, 2002. "Latent class versus two-part models in the demand for physician services across the European Union," Health Economics, John Wiley & Sons, Ltd., vol. 11(4), pages 301-321.
    4. Jonas Schreyögg & Markus M. Grabka, 2008. "Copayments for Ambulatory Care in Germany: A Natural Experiment Using a Difference-in-Difference Approach," Discussion Papers of DIW Berlin 777, DIW Berlin, German Institute for Economic Research.
    5. Nawata, Kazumitsu & Nitta, Ayako & Watanabe, Sonoko & Kawabuchi, Koichi, 2006. "An analysis of the length of stay and effectiveness of treatment for hip fracture patients in Japan: Evaluation of the 2002 revision of the medical service fee schedule," Journal of Health Economics, Elsevier, vol. 25(4), pages 722-739, July.
    6. Alberto Abadie & David Drukker & Jane Leber Herr & Guido W. Imbens, 2004. "Implementing matching estimators for average treatment effects in Stata," Stata Journal, StataCorp LP, vol. 4(3), pages 290-311, September.
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