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Medical Consumption over the Life Cycle: Facts from a U.S. Medical Expenditure Panel Survey

  • Juergen Jung

    ()

    (Department of Economics, Towson University)

  • Chung Tran

    ()

    (Research School of Economics, The Australian National University)

We investigate the association between age and medical spending in the U.S. using data from the Medical Expenditure Panel Survey (MEPS). We estimate a partial linear seminonparametric model and construct "pure" life-cycle profiles of health spending simultaneously controlling for time effects (i.e. institutional changes and business cycles effects) and cohort effects (i.e. generation specific conditions). We find that time and cohort effects introduce a significant estimation bias into predictions of health expenditures per age group, especially for individuals older than 60 years. The estimation biases introduced by cohort effects increase monotonically with age while time effects are non-monotone. Overall, cohort effect biases dominate time effect biases in magnitude for high age groups.

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File URL: http://www.towson.edu/cbe/economics/workingpapers/2010-09.pdf
File Function: First version, 2010
Download Restriction: no

Paper provided by Towson University, Department of Economics in its series Working Papers with number 2010-09.

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Length: 31 pages
Date of creation: Apr 2010
Date of revision: Mar 2013
Handle: RePEc:tow:wpaper:2010-09
Contact details of provider: Postal: Towson, Maryland 21252-0001
Phone: 410-704-2959
Fax: 410-704-3424
Web page: http://www.towson.edu/cbe/economics/

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