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Elasticities of market shares and social health insurance choice in germany: a dynamic panel data approach
Author(s) -
Tamm Marcus,
Tauchmann Harald,
Wasem Jürgen,
Greß Stefan
Publication year - 2007
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.1167
Subject(s) - panel data , economics , competition (biology) , german , market share , health insurance , estimation , econometrics , social insurance , actuarial science , microeconomics , health care , finance , history , ecology , management , archaeology , biology , economic growth , market economy
Abstract In 1996, free choice of health insurers was introduced to the German social health insurance system. One objective was to increase efficiency through competition. A crucial precondition for effective competition among health insurers is that consumers search for lower‐priced health insurers. We test this hypothesis by estimating the price elasticities of insurers' market shares. We use unique panel data and specify a dynamic panel model to explain changes in market shares. Estimation results suggest that short‐run price elasticities are smaller than previously found by other studies. In the long‐run, however, estimation results suggest substantial price effects. Copyright © 2006 John Wiley & Sons, Ltd.