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

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Author Info
Bolhaar, Jonneke
Lindeboom, Maarten
van der Klaauw, Bas

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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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6968.

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Date of creation: Sep 2008
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Handle: RePEc:cpr:ceprdp:6968

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Related research
Keywords: advantageous selection; health care utilization; moral hazard; panel data; supplementary private health insurance;

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Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. de Meza, David & Webb, David C, 2001. "Advantageous Selection in Insurance Markets," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 249-62, Summer.
    Other versions:
  2. Hemenway, David, 1990. "Propitious Selection," The Quarterly Journal of Economics, MIT Press, vol. 105(4), pages 1063-69, November. [Downloadable!] (restricted)
  3. Eddy Van Doorslaer & Andrew M. Jones & Xander Koolman, 2006. "The impact of having supplementary private health insurance on the uses of specialists," Annales d'Economie et de Statistique, ADRES, issue 83-84, pages 10, Juillet-D. [Downloadable!]
  4. Chiappori, Pierre-Andre & Durand, Franck & Geoffard, Pierre-Yves, 1998. "Moral hazard and the demand for physician services: First lessons from a French natural experiment," European Economic Review, Elsevier, vol. 42(3-5), pages 499-511, May. [Downloadable!] (restricted)
    Other versions:
  5. Thomas Buchmueller & Denzil Fiebig & Glenn Jones & Elizabeth Savage, 2008. "Advantageous selection in private health insurance: The case of Australia," Working Papers 2008/2, CHERE, University of Technology, Sydney. [Downloadable!]
  6. Amy Finkelstein & Kathleen McGarry, 2006. "Multiple Dimensions of Private Information: Evidence from the Long-Term Care Insurance Market," American Economic Review, American Economic Association, vol. 96(4), pages 938-958, September. [Downloadable!]
  7. Nolan, Brian & Gannon, Brenda & Layte, Richard & Watson, Dorothy & Whelan, Christopher T. & Williams, James, 2002. "Monitoring Poverty Trends in Ireland: Results from the 2000 Living in Ireland survey," Research Series, Economic and Social Research Institute (ESRI), number PRS45.
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  8. Jeffrey R. Brown & Amy Finkelstein, 2008. "The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market," American Economic Review, American Economic Association, vol. 98(3), pages 1083-1102, June. [Downloadable!]
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  9. Propper, Carol, 1993. "Constrained choice sets in the U.K. demand for private medical insurance," Journal of Public Economics, Elsevier, vol. 51(3), pages 287-307, July. [Downloadable!] (restricted)
  10. Mark Stabile, 2001. "Private insurance subsidies and public health care markets: evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 921-942, November. [Downloadable!] (restricted)
  11. Ángel Marcos Vera-Hernández, 1999. "Duplicate coverage and demand for health care. The case of Catalonia," Health Economics, John Wiley & Sons, Ltd., vol. 8(7), pages 579-598.
  12. Gruber, J. & Poterba, J., 1994. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," Working papers 94-10, Massachusetts Institute of Technology (MIT), Department of Economics.
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  13. Ettner, Susan L., 1997. "Adverse selection and the purchase of Medigap insurance by the elderly," Journal of Health Economics, Elsevier, vol. 16(5), pages 543-562, October. [Downloadable!] (restricted)
  14. Jonathan Meer & Harvey S. Rosen, 2003. "Insurance and the Utilization of Medical Services," NBER Working Papers 9812, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Savage, Elizabeth & Wright, Donald J., 2003. "Moral hazard and adverse selection in Australian private hospitals: 1989-1990," Journal of Health Economics, Elsevier, vol. 22(3), pages 331-359, May. [Downloadable!] (restricted)
  16. Hanming Fang & Michael P. Keane & Dan Silverman, 2008. "Sources of Advantageous Selection: Evidence from the Medigap Insurance Market," Journal of Political Economy, University of Chicago Press, vol. 116(2), pages 303-350, 04. [Downloadable!] (restricted)
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  17. Hurd, Michael D. & McGarry, Kathleen, 1997. "Medical insurance and the use of health care services by the elderly," Journal of Health Economics, Elsevier, vol. 16(2), pages 129-154, April. [Downloadable!] (restricted)
  18. Holly, Alberto & Gardiol, Lucien & Domenighetti, Gianfranco & Brigitte Bisig, 1998. "An econometric model of health care utilization and health insurance in Switzerland," European Economic Review, Elsevier, vol. 42(3-5), pages 513-522, May. [Downloadable!] (restricted)
    Other versions:
  19. Colm Harmon & Brian Nolan, 2001. "Health insurance and health services utilization in Ireland," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 135-145. [Downloadable!]
  20. Cameron, A C & P. K. Trivedi & Frank Milne & J. Piggott, 1988. "A Microeconometric Model of the Demand for Health Care and Health Insurance in Australia," Review of Economic Studies, Blackwell Publishing, vol. 55(1), pages 85-106, January. [Downloadable!] (restricted)
  21. Khwaja, Ahmed & Silverman, Dan & Sloan, Frank & Wang, Yang, 2007. "Smoking, wealth accumulation and the propensity to plan," Economics Letters, Elsevier, vol. 94(1), pages 96-103, January. [Downloadable!] (restricted)
  22. Cardon, James H & Hendel, Igal, 2001. "Asymmetric Information in Health Insurance: Evidence from the National Medical Expenditure Survey," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 408-27, Autumn.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Valerie Albouy & Laurent Davezies & Thierry Debrand, 2009. "Dynamic Estimation of Health Expenditure: A new approach for simulating individual expenditure," Working Papers DT20, IRDES institut for research and information in health economics, revised Jan 2009. [Downloadable!]
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