This report evaluates alternative statistical models of the demand for medical care. The report discusses the estimation problems, the alternative models considered, and the choice of a final model. Chapter 2 briefly describes the design of the Health Insurance Study, which is the source of the data, and the sample. Chapter 3 provides a rationale for and description of each of the models considered, and Chap. 4 indicates the sensitivity of the empirical results to the estimation model. Chapter 5 compares the models empirically in terms of forecast bias and mean squared forecast error, using a split-sample technique. Chapter 6 summarizes the findings of this study.
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