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Likelihood-Based Approaches to Modeling Demand for Medical Care

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  • Michael D. Creel

    ()

  • Montserrat Farell

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Abstract

We review recent likelihood-based approaches to modeling demand for medical care. A semi-nonparametric model along the lines of Cameron and Johansson's Poisson polynomial model, but using a negative binomial baseline model, is introduced. We apply these models, as well a semiparametric Poisson, hurdle semiparametric Poisson, and finite mixtures of negative binomial models to six measures of health care usage taken from the Medical Expenditure Panel survey. We conclude that most of the models lead to statistically similar results, both in terms of information criteria and conditional and unconditional prediction. This suggests that applied researchers may not need to be overly concerned with the choice of which of these models they use to analyze data on health care demand.

Suggested Citation

  • Michael D. Creel & Montserrat Farell, 2001. "Likelihood-Based Approaches to Modeling Demand for Medical Care," UFAE and IAE Working Papers 498.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  • Handle: RePEc:aub:autbar:498.01
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    References listed on IDEAS

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    1. Ángel Marcos Vera-Hernández, 1999. "Duplicate coverage and demand for health care. The case of Catalonia," Health Economics, John Wiley & Sons, Ltd., vol. 8(7), pages 579-598.
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    3. Andr? Romeu-Santana & ?gel M. Vera-Hern?dez, "undated". "A Semi-Nonparametric Estimator For Counts With An Endogenous Dummy. Variable," UFAE and IAE Working Papers 452.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    4. Cameron, A Colin & Trivedi, Pravin K, 1986. "Econometric Models Based on Count Data: Comparisons and Applications of Some Estimators and Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 29-53, January.
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    6. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
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    8. A. Colin Cameron & Per Johansson, 2004. "Bivariate Count Data Regression Using Series Expansions: With Applications," Working Papers 9815, University of California, Davis, Department of Economics.
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    10. 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 223-255, March-Apr.
    11. Gurmu, Shiferaw, 1997. "Semi-Parametric Estimation of Hurdle Regression Models with an Application to Medicaid Utilization," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 225-243, May-June.
    12. Geil, Peter, et al, 1997. "Economic Incentives and Hospitalization in Germany," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 295-311, May-June.
    13. Mullahy, John, 1986. "Specification and testing of some modified count data models," Journal of Econometrics, Elsevier, vol. 33(3), pages 341-365, December.
    14. Windmeijer, F A G & Silva, J M C Santos, 1997. "Endogeneity in Count Data Models: An Application to Demand for Health Care," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 281-294, May-June.
    15. Cameron, A Colin & Johansson, Per, 1997. "Count Data Regression Using Series Expansions: With Applications," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 203-223, May-June.
    16. 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.
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    Cited by:

    1. Michael Creel, 2005. "User-Friendly Parallel Computations with Econometric Examples," UFAE and IAE Working Papers 637.05, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).

    More about this item

    Keywords

    Health care demand; count data; maximum likelihood;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • I10 - Health, Education, and Welfare - - Health - - - General

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