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A Dynamic Analysis of the Demand for Health Insurance and Health Care

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  • Lindeboom, Maarten
  • van der Klaauw, Bas
  • Bolhaar, Jonneke

Abstract

We investigate the presence of moral hazard and advantageous or adverse selection in a market for supplementary health insurance. For this we specify and estimate dynamic models for health insurance decisions and health care utilization. Estimates of the health care utilization models indicate that moral hazard is not important. Furthermore, we find strong evidence for advantageous selection, largely driven by heterogeneity in education, income and health preferences. Finally, we show that ignoring dynamics and unobserved fixed effects changes the results dramatically.

Suggested Citation

  • Lindeboom, Maarten & van der Klaauw, Bas & Bolhaar, Jonneke, 2008. "A Dynamic Analysis of the Demand for Health Insurance and Health Care," CEPR Discussion Papers 6968, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:6968
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    More about this item

    Keywords

    Advantageous selection; Health care utilization; Moral hazard; Panel data; Supplementary private health insurance;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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