Demand for Medical Services: Empirical Evidence
1. According to the RAND Health Insurance Experiment (HIE) paper, what is the health insurance endogeneity issue?
2. Why isn’t RAND Health Insurance Experiment (HIE) subject to the issue of health insurance endogeneity? What causal relationship does RAND HIE try to address?
3. According to the table 2 in the RAND HIE paper, what do the authors suggest by comparing the average/mean statistics of free care group and coinsurance groups (25%, 50%, and 95%)?
4. According to the table 9 in the RAND HIE paper, is the effect of coinsurance on the elasticity of demand consistent with our theoretical prediction? Explain why.
5. What is moral hazard? How is this issue prevalent in the health insurance market?
by Santerre, R., Neun, S. (2013) Health Economics,6th edition, South-Western Cengage Learning, Mason, OH.
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