Measuring annual price elasticities in Dutch health insurance; a new method

Rudy Douven (), Marco Ligthart (), H. Lieverdink and I. Vermeulen
Additional contact information
Rudy Douven: CPB Netherlands Bureau for Economic Policy Analysis
Marco Ligthart: CPB Netherlands Bureau for Economic Policy Analysis

No 90, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: This paper proposes a new method for estimating annual price elasticities from market share data of health insurers. This paper proposes a new method for estimating annual price elasticities from market share data of health insurers. In contrast to traditional methods the elasticity is derived from bilateral price elasticities which relate the net share of switchers between two health insurers not only to their premium difference but also to the market share and premium of the higher priced health insurer. Our new method explains the annual variation in the Dutch market share data better than the traditional methods. We find in the Dutch social health insurance for the period 1996-2005 rather low negative annual price elasticities ranging between 1 and 0. In that period stickiness of insurer choices was high and less than 5% of the population switched annually from health insurer. This result, however, was in sharp contrast with an exceptional high price elasticity of 7 for the year 2006, where after a major health care reform about 18% of the population switched mostly to lower priced health insurers. Besides large media coverage, one important difference with previous years was that many consumers holding an individual contract could switch to a lower priced group contract.

JEL-codes: D12 I11 I18 L11 (search for similar items in EconPapers)
Date: 2007-11
New Economics Papers: this item is included in nep-com, nep-eec, nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://www.cpb.nl/sites/default/files/publicaties ... rance-new-method.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:90

Access Statistics for this paper

More papers in CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis Contact information at EDIRC.
Bibliographic data for series maintained by ().