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A discrete random effects probit model with application to the demand for preventive care

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  • Partha Deb

    (Department of Economics, Indiana University-Purdue University Indianapolis, IN, USA)

Abstract

I have developed a random effects probit model in which the distribution of the random intercept is approximated by a discrete density. Monte Carlo results show that only three to four points of support are required for the discrete density to closely mimic normal and chi-squared densities and provide unbiased estimates of the structural parameters and the variance of the random intercept. The empirical application shows that both observed family characteristics and unobserved family-level heterogeneity are important determinants of the demand for preventive care. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • Partha Deb, 2001. "A discrete random effects probit model with application to the demand for preventive care," Health Economics, John Wiley & Sons, Ltd., vol. 10(5), pages 371-383.
  • Handle: RePEc:wly:hlthec:v:10:y:2001:i:5:p:371-383
    DOI: 10.1002/hec.627
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    References listed on IDEAS

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    1. Lee, Lung-fei, 2000. "A numerically stable quadrature procedure for the one-factor random-component discrete choice model," Journal of Econometrics, Elsevier, vol. 95(1), pages 117-129, March.
    2. Deb, Partha & Trivedi, Pravin K., 2002. "The structure of demand for health care: latent class versus two-part models," Journal of Health Economics, Elsevier, vol. 21(4), pages 601-625, July.
    3. Borjas, George J. & Sueyoshi, Glenn T., 1994. "A two-stage estimator for probit models with structural group effects," Journal of Econometrics, Elsevier, vol. 64(1-2), pages 165-182.
    4. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-764, May.
    5. Deb, Partha & Trivedi, Pravin K, 1997. "Demand for Medical Care by the Elderly: A Finite Mixture Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 313-336, May-June.
    6. Kim, Byung-Do & Blattberg, Robert C & Rossi, Peter E, 1995. "Modeling the Distribution of Price Sensitivity and Implications for Optimal Retail Pricing," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(3), pages 291-303, July.
    7. Jain, Dipak C & Vilcassim, Naufel J & Chintagunta, Pradeep K, 1994. "A Random-Coefficients Logit Brand-Choice Model Applied to Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(3), pages 317-328, July.
    8. Goffe, William L. & Ferrier, Gary D. & Rogers, John, 1994. "Global optimization of statistical functions with simulated annealing," Journal of Econometrics, Elsevier, vol. 60(1-2), pages 65-99.
    9. Keane, Michael, 1993. "Simulation estimation for panel data models with limited dependent variables," MPRA Paper 53029, University Library of Munich, Germany.
    10. Pudney, Stephen & Galassi, Francesco L & Mealli, Fabrizia, 1998. "An Econometric Model of Farm Tenures in Fifteenth-Century Florence," Economica, London School of Economics and Political Science, vol. 65(260), pages 535-556, November.
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    Citations

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    Cited by:

    1. Chun-Chih Chen & Yen-Ju Lin & Ying-Tzu Lin, 2013. "Awareness and utilization of preventive care services among the elderly under National Health Insurance," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 247-260, December.
    2. Francesco, Bartolucci & Silvia, Bacci & Claudia, Pigini, 2015. "A misspecification test for finite-mixture logistic models for clustered binary and ordered responses," MPRA Paper 64220, University Library of Munich, Germany.
    3. G. Miller & Yuriy Pylypchuk, 2014. "Marital Status, Spousal Characteristics, and the Use of Preventive Care," Journal of Family and Economic Issues, Springer, vol. 35(3), pages 323-338, September.
    4. Teresa Bago d'Uva, 2005. "Latent class models for use of primary care: evidence from a British panel," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 873-892.
    5. NicolasR. Ziebarth, 2010. "Estimating Price Elasticities of Convalescent Care Programmes," Economic Journal, Royal Economic Society, vol. 120(545), pages 816-844, June.
    6. Bago d'Uva, Teresa & Jones, Andrew M. & van Doorslaer, Eddy, 2009. "Measurement of horizontal inequity in health care utilisation using European panel data," Journal of Health Economics, Elsevier, vol. 28(2), pages 280-289, March.
    7. Hendrik Schmitz, 2012. "More health care utilization with more insurance coverage? Evidence from a latent class model with German data," Applied Economics, Taylor & Francis Journals, vol. 44(34), pages 4455-4468, December.
    8. Teresa Bago d'Uva, 2006. "Latent class models for utilisation of health care," Health Economics, John Wiley & Sons, Ltd., vol. 15(4), pages 329-343.
    9. Murasko, Jason E., 2006. "Gender differences in the management of risk factors for cardiovascular disease: The importance of insurance status," Social Science & Medicine, Elsevier, vol. 63(7), pages 1745-1756, October.
    10. Bago d'Uva, Teresa & Jones, Andrew M., 2009. "Health care utilisation in Europe: New evidence from the ECHP," Journal of Health Economics, Elsevier, vol. 28(2), pages 265-279, March.
    11. repec:eee:ecosta:v:3:y:2017:i:c:p:112-131 is not listed on IDEAS
    12. Óscar Lourenço & Carlota Quintal & Pedro Lopes Ferreira & Pedro Pita Barros, 2007. "A equidade na utilização de cuidados de saúde em Portugal: Uma avaliação baseada em modelos de contagem," Notas Económicas, Faculty of Economics, University of Coimbra, issue 25, pages 6-26, June.
    13. Paul Contoyannis & Andrew M. Jones & Roberto Leon-Gonzalez, 2004. "Using simulation-based inference with panel data in health economics," Health Economics, John Wiley & Sons, Ltd., vol. 13(2), pages 101-122.
    14. Tian, Wei-Hua & Chen, Chin-Shyan & Liu, Tsai-Ching, 2010. "The demand for preventive care services and its relationship with inpatient services," Health Policy, Elsevier, vol. 94(2), pages 164-174, February.
    15. Jones, A.M, 2010. "Models For Health Care," Health, Econometrics and Data Group (HEDG) Working Papers 10/01, HEDG, c/o Department of Economics, University of York.
    16. Fabbri, Daniele & Monfardini, Chiara, 2009. "Rationing the public provision of healthcare in the presence of private supplements: Evidence from the Italian NHS," Journal of Health Economics, Elsevier, vol. 28(2), pages 290-304, March.

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