Health Insurance and the Demand for Medical Care: a Case Study from China

Zi-Yi Guo

Corporate Model Risk Group, Wells Fargo Bank, N.A., Charlotte, NC, USA

DOI: https://doi.org/10.20448/journal.501.2017.41.8.13

Keywords: Selection effect, Incentive effect, Physician-induced demand.


Abstract

Standard insurance theory expects that expenditures and coverage should be positively correlated, for two main reasons: first, high risky individuals prefer to choose a more generous coverage (selection effect); second, a more extensive coverage may increase health costs (incentive effect). We try to empirically separate the selection effect and incentive effect on the health care expenditures with a novel Chinese dataset. With our estimation, we do find the evidences of selection effect, but fail to find the incentive effect. Besides, we also find some evidences of Physician-Induced Demand.

Downloads

Download data is not yet available.

Similar Articles

You may also start an advanced similarity search for this article.