Unobserved heterogeneity and censoring in the demand for health care
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AuthorLópez Nicolás, Ángel
Research GroupGrupo de I+D en Economía, Políticas Públicas y Salud
Knowledge AreaEconomía Aplicada
SponsorsFinancial support from Merck through the Centre de Recerca d’Economia i Salut is thankfully acknowledged.
PublisherUniversidad Pompeu Fabra. Departamento de Economía y Empresa
Bibliographic CitationLÓPEZ NICOLÁS. Ángel. Unobserved heterogeneity and censoring in the demand for health care. Working Papers, 240: 21, Noviembre 1997
KeywordsDemanda de salud
Datos de panel
Demand for health
In this paper we estimate a demand for private medical services equation based on the tradition of the Grossman´s model of demand for health using data for a panel of Spanish households. The econometric specification accounts for the censored nature of the data, which arises from no participation and infrequency of purchases, and the existence of unobserved heterogeneity, which arises from the non observability of health stata. Our evidence suggests that ignoring these features can have a significant impact on the size, sign and significance of the model estimates. The estimates for the participation and consumption processes also suggest that the deduction of expenditures on health care currently applicable in the Spanish tax system are positively associated to income and fertility.
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