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Using the age-based insurance eligibility criterion to estimate moral hazard in medical care consumption

Yan Zheng, JP Morgan Chase and Co., Wilmington, USA
Tomislav Vukina, Department of Agricultural and Resource Economics, North Carolina State University, Nelson Hall, Raleigh, USA

This paper uses fuzzy regression discontinuity design to estimate the moral hazard effect in health care consumption in the population of young adults. We use invoice data for outpatient hospital services from a regional hospital in Croatia.The estimation is complicated by the fact that the data set consists only of users of medical services, which would tend to underestimate the moral hazard effect. To address this issue we use a modified version of the instrumental variables approach.We find a 92% reduction in the number of hospital visits for individuals who lost insurance coverage when crossing the 18th birthday threshold.

Keywords:  fuzzy regression discontinuity design; instrumental variables; health insurance

Year:  2016   |   Volume:  40   |   Issue:  3   |   Pages:  337 - 356   

Full text (PDF)   |   DOI: 10.3326/fintp.40.3.3   |   E-mail this article   |   Download to citation manager
 September, 2016
III / 2016
EBSCO Publishing
ISSN 1846-887X
e-ISSN 1845-9757
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