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Estimating healthcare demand for an aging population: a flexible and robust bayesian joint model

Mukherji, A., Roychowdhury, S., Ghosh, P. and Brown, S. (2012) Estimating healthcare demand for an aging population: a flexible and robust bayesian joint model. Research Report. Department of Economics, University of Sheffield ISSN 1749-8368


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In this paper, we analyse two frequently used measures of the demand for health care, namely hospital visits and out-of-pocket health care expenditure, which have been analysed separately in the existing literature. Given that these two measures of healthcare demand are highly likely to be closely correlated, we propose a framework to jointly model hospital visits and out-of-pocket medical expenditure. Furthermore, the joint framework allows for the presence of non-linear effects of covariates using splines to capture the effects of aging on healthcare demand. Sample heterogeneity is modelled robustly with the random effects following Dirichlet process priors with explicit cross-part correlation. The findings of our empirical analysis of the U.S. Health and Retirement Survey indicate that the demand for healthcare varies with age and gender and exhibits significant cross-part correlation that provides a rich understanding of how aging affects health care demand, which is of particular policy relevance in the context of an aging population.

Item Type: Monograph (Research Report)
Copyright, Publisher and Additional Information: The Sheffield Economics Research Paper (SERP) series offers a forum for the research output of the academic staff and research students of the Department of Economics, University of Sheffield. Papers are reviewed for quality and presentation by a departmental editor. However, the contents and opinions expressed remain the responsibility of the authors. All papers may be downloaded free on the understanding that the contents are preliminary and therefore permission from the author(s) should be sought before they are referenced.
Institution: The University of Sheffield
Academic Units: The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) > Sheffield Economics Research Papers Series
Depositing User: Miss Anthea Tucker
Date Deposited: 23 Oct 2012 11:00
Last Modified: 10 Jun 2014 14:38
Published Version: http://www.shef.ac.uk/economics/research/serps/yea...
Status: Published
Publisher: Department of Economics, University of Sheffield
Identification Number: 2012027
URI: http://eprints.whiterose.ac.uk/id/eprint/74684

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