Unconditional Demand for Curative Health Inputs

Does Selection on Health Status Matter in the Long Run?

William Dow

Published 1995

Healthy people are routinely ignored when analyzing curative health inputs. This practice overlooks people's long-term ability to affect their chances of falling sick, and may have perverse effects on welfare analyses. A dynamic model implies that input demand estimates conditioned on current illness can only be interpreted as short-run effects, in contrast to the long-run nature of unconditional estimates. In addition, conditional estimates may be biased from both sample-selection, and self-reporting of health status. By jointly modeling discrete choices for health inputs and health outcomes, a test for selection bias is derived using the multinomial probit. In data from Cote d'Ivoire, it is found that the usual short-run demand estimates do not suffer from selection bias. However, these conditional estimates differ from the easily estimated long-run unconditional effects, which are often the more relevant policy parameters.

Document Details

  • Copyright: RAND Corporation
  • Availability: Web-Only
  • Year: 1995
  • Paperback Pages: 60
  • Document Number: DRU-1234-RC

Citation

RAND Style Manual
Dow, William, Unconditional Demand for Curative Health Inputs: Does Selection on Health Status Matter in the Long Run? RAND Corporation, DRU-1234-RC, 1995. As of September 12, 2024: https://www.rand.org/pubs/drafts/DRU1234.html
Chicago Manual of Style
Dow, William, Unconditional Demand for Curative Health Inputs: Does Selection on Health Status Matter in the Long Run? Santa Monica, CA: RAND Corporation, 1995. https://www.rand.org/pubs/drafts/DRU1234.html.
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