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

Zi-Yi Guo
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Zi-Yi Guo: Corporate Model Risk Group, Wells Fargo Bank, N.A., Charlotte, NC United States

Asian Journal of Economics and Empirical Research, 2017, vol. 4, issue 1, 8-13

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.

Keywords: Selection effect; Incentive effect; Physician-induced demand. (search for similar items in EconPapers)
Date: 2017
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