Nonparametric Kernel Estimation of the Impact of Tax Policy on the Demand for Private Health Insurances in Australia

29 Pages Posted: 27 Mar 2015 Last revised: 12 Apr 2015

See all articles by Xiaodong Gong

Xiaodong Gong

Australian National University (ANU) - School of Economics; IZA Institute of Labor Economics

Jiti Gao

Monash University - Department of Econometrics & Business Statistics

Date Written: March 26, 2015

Abstract

This paper is motivated by our attempt to answer an empirical question: how is private health insurance take-up in Australia affected by the income threshold at which the Medicare Levy Surcharge (MLS) kicks in? We propose a new difference de-convolution kernel estimator for the location and size of regression discontinuities. We also propose a bootstrapping procedure for for estimating confidence bands for the estimated discontinuity. Performance of the estimator is evaluated by Monte Carlo simulations before it is applied to estimating the effect of the income threshold of Medicare Levy Surcharge on the take-up of private health insurance in Australia using contaminated data.

Keywords: De-convolution kernel estimator; Regression discontinuity; Error-in-variables; Demand for private health insurance

JEL Classification: C13; C14; C29; I13

Suggested Citation

Gong, Xiaodong and Gao, Jiti, Nonparametric Kernel Estimation of the Impact of Tax Policy on the Demand for Private Health Insurances in Australia (March 26, 2015). Available at SSRN: https://ssrn.com/abstract=2585336 or http://dx.doi.org/10.2139/ssrn.2585336

Xiaodong Gong

Australian National University (ANU) - School of Economics ( email )

Coombs Building 9
Canberra, Australian Capital Territory 0200
Australia
61 2 6125 4235 (Phone)
61 2 6125 0182 (Fax)

HOME PAGE: http://econrsss.anu.edu.au/Staff/gong/contact_xg.htm

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany
049 228/ 3894 527 (Phone)
049 228/ 3894 510 (Fax)

Jiti Gao (Contact Author)

Monash University - Department of Econometrics & Business Statistics ( email )

900 Dandenong Road
Caulfield East, Victoria 3145
Australia
61399031675 (Phone)
61399032007 (Fax)

HOME PAGE: http://www.jitigao.com

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