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Determinants of Health Care Decisions: Insurance, Utilization, and Expenditures

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  • Chan Shen

    (Georgetown University)

Abstract

This paper studies three interrelated health care decisions: insurance, utilization, and expenditures. The model treats insurance as an endogenous variable with respect to both utilization and expenditures, addresses potential selection issues, and takes into account that the decisions to use health care and the level of treatment are determined by different decision makers. We employ semiparametric methods to avoid making distributional assumptions. Using the Medical Expenditure Panel Survey 2005 data, the semiparametric approach predicts insurance to increase the level of expenditures by 48%, a number in accord with an important experimental study and less than half that obtained using parametric methods. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Chan Shen, 2013. "Determinants of Health Care Decisions: Insurance, Utilization, and Expenditures," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 142-153, March.
    • Handle: RePEc:tpr:restat:v:95:y:2013:i:1:p:142-153
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    Citations

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    Cited by:

    1. Joelle Abramowitz & Brett O'Hara & Darcy Steeg Morris, 2017. "Risking Life and Limb: Estimating a Measure of Medical Care Economic Risk and Considering its Implications," Health Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 469-485, April.
    2. Harris, Matthew & Kohn, Jennifer, 2015. "Reference dependent utility from health and the demand for medical care," MPRA Paper 61926, University Library of Munich, Germany.
    3. Biavaschi, Costanza, 2016. "Recovering the counterfactual wage distribution with selective return migration," Labour Economics, Elsevier, vol. 38(C), pages 59-80.
    4. Daniele Fabbri & Chiara Monfardini, 2016. "Opt Out or Top Up? Voluntary Health Care Insurance and the Public vs. Private Substitution," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(1), pages 75-93, February.
    5. Zhewen Pan, 2023. "On semiparametric estimation of the intercept of the sample selection model: a kernel approach," Papers 2302.05089, arXiv.org.
    6. Denise Doiron & Nathan Kettlewell, 2018. "The Effect of Health Insurance on the Substitution between Public and Private Hospital Care," The Economic Record, The Economic Society of Australia, vol. 94(305), pages 135-154, June.

    More about this item

    Keywords

    health care insurance; health care expenditures; health care utilization;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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