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 January 01, 2002

by M. Susan Marquis, Thomas A. Louis

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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.

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