An empirical analysis of the demand for health using the European Community Household Panel

Abstract

This paper estimates demand for health equations using three waves of data from the European Community Household Panel. The economic model is a typical specification of Grossman's [1] proposal. The paper focuses on three specific points: i) the existence of two stages in the demand for health decision process (to contact a physician and how often to visit him). ii) the analysis of this double-hurdle process in different scenarios (visits to the general practitioners, the specialists and the dentists). iii) the analysis of differences across countries due to the differences on the coverage of the National Insurance Systems. The results suggest that the contact and frequency decisions of visits to either the general practitioner, the specialist or even the dentist are governed by different stochastic processes. As expected, we find some differences in the behaviour of men and women, mainly in the decisions to visit and the number of visits to specialist. We also show that the behavioural differences across countries are not extremely important, being perhaps income a determinant of the decision to contact and the intensity of the treatment in poor countries.