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Two-part multiple spell models for health care demand

Author

Listed:
  • Joao Santos Silva Santos Silva

    (Institute for Fiscal Studies)

  • Frank Windmeijer

    (Institute for Fiscal Studies and University of Bristol)

Abstract

The demand for certain types of health care services depends on decisions of both the individual and the health care provider. This paper studies the conditions under which it is possible to separately identify the parameters driving the two decision processes using only count data on the total demand. It is found that the frequently used hurdle models may not be adequate to describe this type of demand, especially when the assumption of a single illness spell per observation period is violated. A test for the single spell hypothesis is developed and alternative modelling strategies are suggested, including one that allows for correlated unobserved heterogeneity. The results of the paper are illustrated with an application.

Suggested Citation

  • Joao Santos Silva Santos Silva & Frank Windmeijer, 1999. "Two-part multiple spell models for health care demand," IFS Working Papers W99/02, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:99/02
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    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • 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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