On Using Sample Selection Methods in Estimating the Price Elasticity of Firms' Demand for Insurance
Published in: Journal of Health Economics, v. 21, no. 1, Jan. 2002, p. 137-145
Posted on RAND.org on December 31, 2001
The authors evaluate a technique based on sample selection models that has been used by health economists to estimate the price elasticity of firms' demand for insurance. The authors demonstrate that, this technique produces inflated estimates of the price elasticity. They show that alternative methods lead to valid estimates.