On the distribution and dynamics of health costs

Eric French and John Jones

No WP-02-21, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: Using data from the Health and Retirement Survey (HRS) and Assets and Health Dynamics of the Oldest Old (AHEAD), this paper presents estimates of the stochastic process that determines both the distribution and dynamics of health costs. We find that the data generating process for health costs is well represented by an ARMA(1,1). Furthermore, innovations to this process are close to lognormally distributed. In any given year, .1% of our sample receives a health cost shock that costs at least $80,000 in present value. Lastly, we discuss the accuracy of numerical solutions when integrating over health costs. Assuming lognormality, simple approximation rules work well.

Keywords: Medical care, Cost of; Retirement (search for similar items in EconPapers)
Date: 2002
New Economics Papers: this item is included in nep-hea
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.chicagofed.org/digital_assets/publicati ... s/2002/wp2002-21.pdf (application/pdf)

Related works:
Working Paper: On the Distribution and Dynamics of Health Costs (2002)
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:fip:fedhwp:wp-02-21

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of Chicago Contact information at EDIRC.
Bibliographic data for series maintained by Lauren Wiese ().