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Health‐Specific Moral Hazard Effects
Author(s) -
Koç Çağatay
Publication year - 2005
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.2005.tb00690.x
Subject(s) - moral hazard , endogeneity , morale hazard , actuarial science , health care , panel data , health insurance , health hazard , medical expenditure panel survey , hazard ratio , hazard , business , economics , environmental health , demographic economics , public economics , self insurance , medicine , econometrics , microeconomics , incentive , economic growth , confidence interval , chemistry , organic chemistry
In this paper I examine the effect of insurance on the demand for health care among consumers of similar health, which I call the health‐specific moral hazard effect. Using the 2000 Medical Expenditure Panel Survey, I analyze the variation in the moral hazard effect across health subpopulations in the demand for inpatient and outpatient services. The endogeneity of insurance, the change of insurance regime, and the discreteness and the nonnegativity of the use of health care motivate the use of an endogenous switching model for count data. The econometric results indicate that the moral hazard effect for physician visits is higher at relatively higher levels of health, whereas the effect for both hospital nights and hospital admissions is lower at relatively higher levels of health. The evidence suggests that both efficient and inefficient moral hazard may exist, and this may depend on the type of health care service used.