Do Red Herrings Swim in Circles? – Controlling for the Endogeneity of Time to Death
AbstractStudies on the effect of ageing on health care expenditures (HCE) have revealed the importance of controlling for time-to-death (TTD). These studies, however, are subject to possible endogeneity if HCE influences remaining life expectancy.This paper introduces a ten year observational period on monthly HCE, socioeconomic characteristics, and survivor status to first predict TTD and then uses predicted values of TTD as an instrument in the regression for HCE.While exogeneity of TTD has to be rejected, core results concerning the role of TTD rather than age as a determinant of HCE (the “red herring” hypothesis) are confirmed.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0073.
Length: 19 pages
Date of creation: Oct 2008
Date of revision:
Other versions of this item:
- Felder, Stefan & Werblow, Andreas & Zweifel, Peter, 2010. "Do red herrings swim in circles? Controlling for the endogeneity of time to death," Journal of Health Economics, Elsevier, vol. 29(2), pages 205-212, March.
- I10 - Health, Education, and Welfare - - Health - - - General
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
This paper has been announced in the following NEP Reports:
- NEP-AGE-2008-11-04 (Economics of Ageing)
- NEP-ALL-2008-11-04 (All new papers)
- NEP-HEA-2008-11-04 (Health Economics)
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.:
- Robert E. Hall & Charles I. Jones, 2004.
"The Value of Life and the Rise in Health Spending,"
NBER Working Papers
10737, National Bureau of Economic Research, Inc.
- Robert E. Hall & Charles I. Jones, 2005. "The value of life and the rise in health spending," Proceedings, Federal Reserve Bank of San Francisco.
- Robert E Hall & Charles I Jones, 2007. "The Value of Life and the Rise in Health Spending," The Quarterly Journal of Economics, MIT Press, vol. 122(1), pages 39-72, 02.
- Kevin M. Murphy & Robert H. Topel, 2005.
"The Value of Health and Longevity,"
NBER Working Papers
11405, National Bureau of Economic Research, Inc.
- Peter Zweifel & Stefan Felder & Markus Meiers, 1999. "Ageing of population and health care expenditure: a red herring?," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 485-496.
- Felder, Stefan & Meier, Markus & Schmitt, Horst, 2000. "Health care expenditure in the last months of life," Journal of Health Economics, Elsevier, vol. 19(5), pages 679-695, September.
- Meena Seshamani & Alastair Gray, 2004. "Ageing and health-care expenditure: the red herring argument revisited," Health Economics, John Wiley & Sons, Ltd., vol. 13(4), pages 303-314.
- Dov Chernichovsky & Sara Markowitz, 2004. "Aging and aggregate costs of medical care: conceptual and policy issues," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 543-562.
- Christian Salas & James P. Raftery, 2001. "Econometric issues in testing the age neutrality of health care expenditure," Health Economics, John Wiley & Sons, Ltd., vol. 10(7), pages 669-671.
- Peter Zweifel & Lukas Steinmann & Patrick Eugster, 2005. "The Sisyphus Syndrome in Health Revisited," International Journal of Health Care Finance and Economics, Springer, vol. 5(2), pages 127-145, June.
- Martin Schellhorn & Andreas E. Stuck & Christoph E. Minder & John C. Beck, 2000. "Health services utilization of elderly Swiss: evidence from panel data," Health Economics, John Wiley & Sons, Ltd., vol. 9(6), pages 533-545.
- Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-29, October.
- Karlsson, Martin & Klohn, Florian, 2011. "Some notes on how to catch a red herring - Ageing, time-to-death and care costs for older people in Sweden," HERO On line Working Paper Series 2011:6, Oslo University, Health Economics Research Programme.
- Karlsson, Martin & Klohn, Florian, 2011. "Some notes on how to catch a red herring Ageing, time-to-death & care costs for older people in Sweden," Darmstadt Discussion Papers in Economics 57663, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
- de Meijer, Claudine & Koopmanschap, Marc & d' Uva, Teresa Bago & van Doorslaer, Eddy, 2011. "Determinants of long-term care spending: Age, time to death or disability?," Journal of Health Economics, Elsevier, vol. 30(2), pages 425-438, March.
- Stefan Felder, 2013. "The Impact of Demographic Change on Healthcare Expenditure," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 11(1), pages 03-06, 04.
- Peter Zweifel, 2013. "The Grossman model after 40 years: response to Robert Kaestner," The European Journal of Health Economics, Springer, vol. 14(2), pages 361-362, April.
- Vincenzo Atella & Valentina Conti, 2013. "The effect of age and time to death on health care expenditures: the Italian experience," CEIS Research Paper 267, Tor Vergata University, CEIS, revised 12 Nov 2013.
- Melberg, Hans Olav & Sørensen, Jan, 2013. "How does end of life costs and increases in life expectancy affect projections of future hospital spending?," HERO On line Working Paper Series 2013:9, Oslo University, Health Economics Research Programme.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Weiler).
If references are entirely missing, you can add them using this form.