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A dynamic model of demand for private health insurance in Ireland

Author

Listed:
  • Finn, Claire

    (UCD)

  • Harmon, Colm

    (UCD)

Abstract

The Irish health care system offers a tax financed, universal entitlement to public care at a nominal user fee, nonetheless 50% of the Irish population purchase private health insurance. This paper empirically models the propensity to insure as a function of individual and household characteristics using panel data analysis and compares three alternate approaches; a static, chamberlain-mundlak and dynamic specification. Using panel data from 1994 to 2000, we consider whether propensity to insure is in fact a function of heterogeneity or of state dependence. A range of individual and household characteristics is shown to influence propensity to insure. Overall the positive effect of education and income and the negative effect of poor heath status remain robust across three specifications. In moving toward a dynamic specification, we show that persistence is a highly significant determinant of demand for private health insurance and also that it reduces the size of the coefficients on the regressors. The latter point highlights that while education, income and, to a lesser extent, health status have very large effects on probability of insuring, these effects are overestimated where no attempt is made to control for unobserved heterogeneity or state dependence.

Suggested Citation

  • Finn, Claire & Harmon, Colm, 2006. "A dynamic model of demand for private health insurance in Ireland," Papers HRBWP17, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:hrb17
    Note: Published by ESRI, ISSC & University of Ulster
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    References listed on IDEAS

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    Cited by:

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    2. Mario Lucchini & Christine Butti & Sara Della Bella & Angela Lisi, 2018. "The application of a topological clustering technique to capture forms and dynamics of deprivation in contemporary Switzerland," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(1), pages 227-248, January.
    3. Kwame Adjei-Mantey & Charles Yuji Horioka, 2023. "Determinants of health insurance enrollment and health expenditure in Ghana: an empirical analysis," Review of Economics of the Household, Springer, vol. 21(4), pages 1269-1288, December.
    4. Okore Apia Okorafor, 2012. "National health insurance reform in South Africa," Applied Health Economics and Health Policy, Springer, vol. 10(3), pages 189-200, May.
    5. Gabriela Mihaela Mure?an & Cristian Mihai Dragos & Codru?a Mare & Simona Laura Dragos & Alexandra Pintea, 2021. "Socio-Economic and Macro-Financial Determinants and Spatial Effects on European Private Health Insurance Markets," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 23(56), pages 290-290, February.
    6. Kanika Kapur, 2020. "Private Health Insurance in Ireland: Trends and Determinants," The Economic and Social Review, Economic and Social Studies, vol. 51(1), pages 63-92.
    7. Medard, Turyamureba & Yawe, Bruno L. & Bosco, Oryema John, 2022. "Determinants of Demand for Private Health Insurance in Uganda," African Journal of Economic Review, African Journal of Economic Review, vol. 10(3), June.
    8. Okore Okorafor, 2012. "National health insurance reform in South Africa," Applied Health Economics and Health Policy, Springer, vol. 10(3), pages 189-200, May.

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    Keywords

    hrb;

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I10 - Health, Education, and Welfare - - Health - - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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