Valerie Albouy () (INSEE Institut national de la statistique et des études économiques) Laurent Davezies () (INSEE Institut national de la statistique et des études économiques) Thierry Debrand () (IRDES institut for research and information in health economics)
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This study compares estimates of outpatient expenditure computed with different models. Our aim is to predict annual health expenditures. We use a French panel dataset over a six year period (2000-2006) for 7112 individuals. Our article is based on the estimations of five different models. The first model is a simple two part model estimated in cross section. The other models (models 2 to 5) are estimated with selection models (or generalized tobit models). Model 2 is a basic sample selection model in cross section. Model 3 is similar to model 2, but takes into account the panel dimension. It includes constant unobserved heterogeneity to deal with state dependency. Model 4 is a dynamic sample selection model (with lagged adjustement), while in model 5, we take into account the possible heteroskedasticity of residuals in the dynamic model. We find that all the models have the same properties in the cross section dimension (distribution, probability of health care use by gender and age, health expenditure by gender and age) but model 5 gives better results reflecting the temporal correlation with health expenditure. Indeed, the retransformation of predicted log transformed expenditures in homoscedastic models (models 1 to 4) generates very poor temporal correlation for " heavy consumers ", although the data show the contrary. Incorporation of heteroskedasticity gives better results in terms of temporal correlation.
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Paper provided by IRDES institut for research and information in health economics in its series Working Papers with number
DT20.
Find related papers by JEL classification: I0 - Health, Education, and Welfare - - General C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General C5 - Mathematical and Quantitative Methods - - Econometric Modeling
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Jones, Andrew M., 2000.
"Health econometrics,"
Handbook of Health Economics,
in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 6, pages 265-344
Elsevier.
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Verbeek, Marno & Nijman, Theo, 1992.
"Testing for Selectivity Bias in Panel Data Models,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 681-703, August.
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