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Health Care Facility Choice and User Fee Abolition: Regression Discontinuity in a Multinomial Choice Setting

  • Steven F. Koch and Jeffrey S. Racine

We apply parametric and nonparametric regression discontinuity methodology within a multinomial choice setting to examine the impact of public health care user fee abolition on health facility choice using data from South Africa. The nonparametric model is found to outperform the parametric model both in- and out-of-sample, while also delivering more plausible estimates of the impact of user fee abolition (i.e. the `treatment effect'). In the parametric framework, treatment effects were relatively constant { around 7% { and that increase was drawn equally from both home care and private care groups. On the other hand, in the nonpara-metric framework treatment effects were largest for the least well-off (also around 7%) but fell for the most well-off. More plausibly, that increase was drawn primarily from the home care group, suggesting that the policy favoured those least well-off as more of these children received at least some minimum level of professional health care after the policy was implemented. Regarding the most well-off, despite having access to free public health care, children were still far more likely to receive health care at private facilities than at public facilities, which is also more plausible in South Africa's two-tier health sector.

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Paper provided by Economic Research Southern Africa in its series Working Papers with number 373.

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Length: 37 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:rza:wpaper:373
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  1. Christopher Carpenter & Carlos Dobkin, 2007. "The Effect of Alcohol Consumption on Mortality: Regression Discontinuity Evidence from the Minimum Drinking Age," NBER Working Papers 13374, National Bureau of Economic Research, Inc.
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  11. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
  12. Jeffrey S. Racine & Christopher F. Parmeter, 2012. "Data-Driven Model Evaluation: A Test for Revealed Performance," Department of Economics Working Papers 2012-13, McMaster University.
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  14. Ou, Dongshu, 2010. "To leave or not to leave? A regression discontinuity analysis of the impact of failing the high school exit exam," Economics of Education Review, Elsevier, vol. 29(2), pages 171-186, April.
  15. Racine, Jeffrey S., 2008. "Nonparametric Econometrics: A Primer," Foundations and Trends(R) in Econometrics, now publishers, vol. 3(1), pages 1-88, March.
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