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✦   LIBER   ✦

New estimates of the demand for physical and mental health treatment

✍ Scribed by Chad D. Meyerhoefer; Samuel H. Zuvekas

Publisher
John Wiley and Sons
Year
2009
Tongue
English
Weight
174 KB
Volume
19
Category
Article
ISSN
1057-9230

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✦ Synopsis

Abstract

Consumers' price responsiveness is central to US health‐care reform proposals, but the best available estimates are now more than 25 years old. We estimate health‐care demands by calculating expected end‐of‐year prices and incorporating them into a zero‐inflated ordered probit model applied to several overlapping panels of data from 1996 to 2003. Results from our correlated random effects specification indicate that the price responsiveness of ambulatory mental health treatment has decreased substantially and is now slightly lower than physical health treatment. This suggests that concerns over moral hazard alone do not warrant less generous coverage for mental health. However, prescription drug demand is more price elastic. Published in 2009 by John Wiley & Sons, Ltd.

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