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Comment--Defining health insurance affordability: Unobserved heterogeneity matters


  • Bradley, Ralph


Affordability is a vague concept. Bundorf and Pauly [Bundorf, M.K., Pauly, M.V., 2006. Is health insurance affordable for the uninsured? Journal of Health Economics 25 (4), 650-673] address this problem by establishing clear working definitions of affordability, and they use these definitions to estimate the percent of the uninsured who can afford insurance. When they establish their definitions of affordability, they use a microeconomic model that omits essential characteristics of the health insurance market. This comment suggests alternative definitions that better incorporate the structure of the health insurance market, discusses both endogeneity and specification problems that might occur when implementing their econometric model to estimate the fraction of "uninsured afforders," and then recommends ways to reduce omitted variable bias and endogeneity bias.

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  • Bradley, Ralph, 2008. "Comment--Defining health insurance affordability: Unobserved heterogeneity matters," Journal of Health Economics, Elsevier, vol. 27(4), pages 1129-1140, July.
  • Handle: RePEc:eee:jhecon:v:27:y:2008:i:4:p:1129-1140

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    References listed on IDEAS

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    Cited by:

    1. Michel Grignon & Bidénam Kambia-Chopin, 2009. "Income and the Demand for Complementary Health Insurance in France," Working Papers DT24, IRDES institut for research and information in health economics, revised Apr 2009.
    2. Niëns, L.M. & Brouwer, W.B.F., 2013. "Measuring the affordability of medicines: Importance and challenges," Health Policy, Elsevier, vol. 112(1), pages 45-52.

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