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An Econometric Model of the Two-Part Decisionmaking Process in the Demand for Health Care

1995; University of Wisconsin Press; Volume: 30; Issue: 2 Linguagem: Inglês

10.2307/146123

1548-8004

Winfried Pohlmeier, Volker Ulrich,

Economic and Environmental Valuation

The decision to contact a physician and the decision about how often to contact a physician are determined by different decisionmakers. We introduce a negative binomial distributed hurdle model that specifies the two stages of the decisionmaking process as different stochastic processes, while at the same time taking 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 need to be treated as two distinct processes. This, in turn, implies that ignoring this distinction leads to serious misinterpretation.