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Contact decision and frequency decision: an econometric model of the demand for ambulatory services

Winfried Pohlmeier () and Volker Ulrich

No 92-09, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: The decision to contact a physician and the decision, how often to contact a physician, are based on different decision makers. We introduce a negative binominal distributed hurdle model that specifies the two stages of the decision process as different stochastic processes, and takes also care of the discrete nature of the data. Empirical results are based on a cross-section of the West-German Socioeconomic Panel. Specification tests reveal, that the two stages of the process have to be treated as distinct processes. Ignoring this distinction leads to serious misinterpretations.

Date: 1992
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