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A dynamic model of demand for private health insurance in Ireland
Author(s)
Date Issued
2006-11-23
Date Available
2009-04-28T16:27:52Z
Abstract
The Irish health care system offers a tax financed, universal entitlement to public care at a nominal user fee, nonetheless 50% of the Irish population purchase private health insurance. This paper empirically models the propensity to insure as a function of individual and household characteristics using panel data analysis and compares three alternate approaches; a static, chamberlain-mundlak and dynamic specification. Using panel data from 1994 to 2000, we consider whether propensity to insure is in fact a function of heterogeneity or of state dependence. A range of individual and household characteristics is shown to influence propensity to insure. Overall the positive effect of education and income and the negative effect of poor heath status remain robust across three specifications. In moving toward a dynamic specification, we show that persistence is a highly significant determinant of demand for private health insurance and also that it reduces the size of the coefficients on the regressors. The latter point highlights that while education, income and, to a lesser extent, health status have very
large effects on probability of insuring, these effects are overestimated where no attempt is made to control for unobserved heterogeneity or state dependence.
large effects on probability of insuring, these effects are overestimated where no attempt is made to control for unobserved heterogeneity or state dependence.
Sponsorship
Irish Research Council for the Humanities and Social Sciences; Endeavour Awards
Australia Postgraduate and Post-doctoral Research Fellowship Programme; Higher Education Authority Programme for Research in Third-Level Institutions
Type of Material
Working Paper
Publisher
University College Dublin. Geary Institute
Series
UCD Geary Institute Discussion Paper Series
WP/2006/12
Copyright (Published Version)
2006 Geary Institute
Classification
G22
I10
D01
Subject – LCSH
Health insurance--Ireland
Medical care--Ireland
Consumer behavior
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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harmonc_workpap_016.pdf
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240.54 KB
Format
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8e341ecbc6d791035b52e3c5b147d75b
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