This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Stochastic Model of Demand for Medical Care with Endogenous Labour Supply and Health Insurance

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Sidorenko, Alexandra ()
Abstract

The paper proposes a model of demand for medical care under uncertainty. Both health capital and wealth are modelled as Wiener processes. The model uses a continuous time stochastic optimisation technique to derive optimal solutions for consumption, leisure and medical care. Insurance against uncertain medical expenditure is then incorporated into the optimisation problem under the assumption of constant relative risk aversion of the value function, and constant elasticity, relative risk aversion and relative prudence of the health investment function. The optimal solution is shown to depend on the curvature of the value function, the curvature of the health investment technology, and variances of the stochastic shocks. Dynamic simulations of the model are carried out.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://rspas.anu.edu.au/economics/publish/papers/wp2001/2001-08%20Sidorenko%20WP.pdf
File Format: application/pdf
File Function: File-Size : 345KB
Download Restriction: no

Publisher Info
Paper provided by Australian National University, Economics RSPAS in its series Departmental Working Papers with number 2001-08.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 32 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:pas:papers:2001-08

Contact details of provider:
Postal: The Administrator, Canberra ACT 0200
Phone: +61 2 6125 2188
Fax: +61 2 6125 3700
Email:
Web page: http://rspas.anu.edu.au/economics/publications.php
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords: Demand for health Uncertainty Insurance Stochastic optimisation

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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. Arnold Zellner & Franz C. Palm, 2000. "Correction," Econometrica, Econometric Society, vol. 68(5), pages 1293-1294, September.
  2. Karni, Edi, 1979. "On Multivariate Risk Aversion," Econometrica, Econometric Society, vol. 47(6), pages 1391-1401, November. [Downloadable!] (restricted)
  3. Manning, Willard G. & Marquis, M. Susan, 1996. "Health insurance: The tradeoff between risk pooling and moral hazard," Journal of Health Economics, Elsevier, vol. 15(5), pages 609-639, October. [Downloadable!] (restricted)
  4. Feldman, Roger & Dowd, Bryan, 1991. "A New Estimate of the Welfare Loss of Excess Health Insurance," American Economic Review, American Economic Association, vol. 81(1), pages 297-301, March.
  5. Liljas, Bengt, 1998. "The demand for health with uncertainty and insurance," Journal of Health Economics, Elsevier, vol. 17(2), pages 153-170, April. [Downloadable!] (restricted)
  6. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr. [Downloadable!] (restricted)
  7. Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug.. [Downloadable!] (restricted)
  8. Picone, Gabriel & Uribe, Martin & Mark Wilson, R., 1998. "The effect of uncertainty on the demand for medical care, health capital and wealth," Journal of Health Economics, Elsevier, vol. 17(2), pages 171-185, April. [Downloadable!] (restricted)
  9. Blomqvist, Ake, 1997. "Optimal non-linear health insurance," Journal of Health Economics, Elsevier, vol. 16(3), pages 303-321, June. [Downloadable!] (restricted)
  10. David M. Cutler & Richard J. Zeckhauser, 1999. "The Anatomy of Health Insurance," NBER Working Papers 7176, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Cropper, M L, 1977. "Health, Investment in Health, and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1273-94, December. [Downloadable!] (restricted)
  12. Friedman, Bernard, 1974. "Risk Aversion and the Consumer Choice of Health Insurance Option," The Review of Economics and Statistics, MIT Press, vol. 56(2), pages 209-14, May. [Downloadable!] (restricted)
  13. Zeckhauser, Richard, 1970. "Medical insurance: A case study of the tradeoff between risk spreading and appropriate incentives," Journal of Economic Theory, Elsevier, vol. 2(1), pages 10-26, March. [Downloadable!] (restricted)
  14. Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
  15. Ehrlich, Isaac & Chuma, Hiroyuki, 1990. "A Model of the Demand for Longevity and the Value of Life Extension," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 761-82, August. [Downloadable!] (restricted)
  16. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January. [Downloadable!] (restricted)
    Other versions:
  17. Contoyannis, Paul & Forster, Martin, 1999. "The distribution of health and income: a theoretical framework," Journal of Health Economics, Elsevier, vol. 18(5), pages 603-620, October. [Downloadable!] (restricted)
    Other versions:
  18. Ried, Walter, 1998. "Comparative dynamic analysis of the full Grossman model," Journal of Health Economics, Elsevier, vol. 17(4), pages 383-425, August. [Downloadable!] (restricted)
  19. Blanchard, Olivier Jean & Mankiw, N Gregory, 1988. "Consumption: Beyond Certainty Equivalence," American Economic Review, American Economic Association, vol. 78(2), pages 173-77, May. [Downloadable!] (restricted)
    Other versions:
  20. Gerdtham, U. -G. & Johannesson, M. & Lundberg, L. & Isacson, D., 1999. "A note on validating Wagstaff and van Doorslaer's health measure in the analysis of inequalities in health," Journal of Health Economics, Elsevier, vol. 18(1), pages 117-124, January. [Downloadable!] (restricted)
  21. Feldstein, Martin S, 1973. "The Welfare Loss of Excess Health Insurance," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 251-80, Part I, M. [Downloadable!] (restricted)
  22. Spence, Michael & Zeckhauser, Richard, 1971. "Insurance, Information, and Individual Action," American Economic Review, American Economic Association, vol. 61(2), pages 380-87, May.
  23. Dardanoni, Valentino & Wagstaff, Adam, 1990. "Uncertainty and the demand for medical care," Journal of Health Economics, Elsevier, vol. 9(1), pages 23-38, June. [Downloadable!] (restricted)
    Other versions:
  24. Marquis, M Susan & Holmer, Martin R, 1996. "Alternative Models of Choice under Uncertainty and Demand for Health Insurance," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 421-27, August. [Downloadable!] (restricted)
  25. Kihlstrom, Richard E. & Mirman, Leonard J., 1974. "Risk aversion with many commodities," Journal of Economic Theory, Elsevier, vol. 8(3), pages 361-388, July. [Downloadable!] (restricted)
  26. Phelps, Charles E & Newhouse, Joseph P, 1974. "Coinsurance, the Price of Time, and the Demand for Medical Services," The Review of Economics and Statistics, MIT Press, vol. 56(3), pages 334-42, August. [Downloadable!] (restricted)
  27. Michael Grossman, 1999. "The Human Capital Model of the Demand for Health," NBER Working Papers 7078, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? About five million pdf files are downloaded through RePEc every year.

This page was last updated on 2008-10-23.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.