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The Aggregate Demand for Private Health Insurance Coverage in the U.S


  • Carmelo Giaccotto

    (University of Connecticut)

  • Rexford E. Santerre

    (University of Connecticut)

  • Francis W. Ahking

    (University of Connecticut)


This paper estimates the aggregate demand for private health insurance coverage in the U.S. using an error-correction model and by recognizing that people are without private health insurance for voluntary, structural, frictional, and cyclical reasons and because of public alternatives. Insurance coverage is measured both by the percentage of the population enrolled in private health insurance plans and the completeness of the insurance coverage. Annual data for the period 1966-1999 are used and both short and long run price and income elasticities of demand are estimated. The empirical findings indicate that both private insurance enrollment and completeness are relatively inelastic with respect to changes in price and income in the short and long run. Moreover, private health insurance enrollment is found to be inversely related to the poverty rate, particularly in the short-run. Finally, our results suggest that an increase in the number cyclically uninsured generates less of a welfare loss than an increase in the structurally uninsured.

Suggested Citation

  • Carmelo Giaccotto & Rexford E. Santerre & Francis W. Ahking, 2005. "The Aggregate Demand for Private Health Insurance Coverage in the U.S," Working papers 2005-43, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2005-43 Note: We have received many helpful comments from Mark Pauly, Barbara Beliveau, Dave Gulley, John Harding, Staff Johnson, Steve Miller, Tom O.Brien, and John Vernon. We also thank two anonymous referees of this journal for helpful comments on an earlier version of this paper. All remaining errors are our responsibility.

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    References listed on IDEAS

    1. Pesaran, M. Hashem & Shin, Yongcheol & Smith, Richard J., 2000. "Structural analysis of vector error correction models with exogenous I(1) variables," Journal of Econometrics, Elsevier, vol. 97(2), pages 293-343, August.
    2. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General

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