Moral Hazard and the Demand for Health Services: A Matching Estimator Approach

44 Pages Posted: 18 May 2006

See all articles by Anna Sanz-de-Galdeano

Anna Sanz-de-Galdeano

Universitat Autònoma de Barcelona; IZA Institute of Labor Economics

Matilde Pinto Machado

Universidad Carlos III de Madrid - Department of Economics

Pedro P. Barros

Universidade Nova de Lisboa

Date Written: February 2006

Abstract

We estimate the impact of health insurance coverage beyond National Health Insurance on the demand for several health services. Traditionally, the literature has tried to deal with the endogeneity of the private (extra) insurance decision by finding instrumental variables. Since a priori instrumental variables are hard to find we take a different approach. We focus on the most common health insurance plan in Portugal, ADSE, which is given to all civil servants and their dependants. We argue this insurance is exogenous i.e. not correlated with beneficiaries' health status. This identifying assumption allows us to estimate the impact of having ADSE coverage on three different health services using a matching estimator technique. The health services used are: number of visits, number of blood and urine tests, and the probability of visiting a dentist. Results show large positive effects of ADSE for number of visits and tests among the young (18 to 30 years old) but only the latter is statistically significantly different from zero. The effects represent 21.8 and 30% of the average number of visits and tests for the young. On the contrary, we find no evidence of moral hazard on the probability of visiting a dentist.

Keywords: Demand for health services, matching estimator, moral hazard, Portuguese health system

JEL Classification: C31, I11

Suggested Citation

Sanz De Galdeano, Anna and Machado, Matilde P and Pita Barros, Pedro Luis, Moral Hazard and the Demand for Health Services: A Matching Estimator Approach (February 2006). CEPR Discussion Paper No. 5488. Available at SSRN: https://ssrn.com/abstract=903182

Anna Sanz De Galdeano (Contact Author)

Universitat Autònoma de Barcelona ( email )

Edifici B - Campus Bellaterra
Barcelona, 08193
Spain

IZA Institute of Labor Economics

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

Matilde P Machado

Universidad Carlos III de Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain
+34 91 624 9571 (Phone)
+34 91 624 9875 (Fax)

Pedro Luis Pita Barros

Universidade Nova de Lisboa ( email )

Campus de Campolide
Lisboa, 1099-032
Portugal
+351 21 383 3624 (Phone)
+351 21 388 6073 (Fax)

HOME PAGE: http://ppbarros.fe.unl.pt

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