The Fixed-Effects Zero-Inflated Poisson Model with an Application to Health Care Utilization

CentER Working Paper Series No. 2011-083

33 Pages Posted: 1 Aug 2011

See all articles by Maria Cristina Majo

Maria Cristina Majo

Trimbos Institute

Arthur van Soest

Tilburg University; Netspar; RAND Corporation; Institute for the Study of Labor (IZA)

Date Written: July 25, 2011

Abstract

Response variables that are scored as counts and that present a large number of zeros often arise in quantitative health care analysis. We define a zero-inflated Poisson model with fixed-effects in both of its equations to identify respondent and health-related characteristics associated with health care demand. This is a new model that is proposed to model count measures of health care utilization and account for the panel structure of the data. Parameter estimation is achieved by conditional maximum likelihood. An application of the new model is implemented using micro level data from the 2004-2006 Survey of Health, Ageing and Retirement in Europe (SHARE), and compared to existing panel data models for count data. Results show that separately controlling for whether outcomes are zero or positive in one of the two years does make a difference for counts with a larger number of zeros.

Keywords: Count Data, Zero-Inflated Poisson Model, Fixed-effects, SHARE

JEL Classification: J14, C14, C33

Suggested Citation

Majo, Maria Cristina and van Soest, Arthur H. O., The Fixed-Effects Zero-Inflated Poisson Model with an Application to Health Care Utilization (July 25, 2011). CentER Working Paper Series No. 2011-083. Available at SSRN: https://ssrn.com/abstract=1899582 or http://dx.doi.org/10.2139/ssrn.1899582

Maria Cristina Majo (Contact Author)

Trimbos Institute ( email )

Da Costakade 45
3521 VS Utrecht
Utrecht
Netherlands

Arthur H. O. van Soest

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

RAND Corporation ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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