Zero-inflated endogenous count in censored model: Effects of informal family care on formal health care

Myoung Jae Lee, Young Sook Kim

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

If informal family health care is a substitute for formal health care, then there is a scope to reduce formal health care cost by promoting informal family health care. With the use of Korean data for the elderly, this paper estimates the effects of informal family health care on formal health care, where the former is measured by the number of caregivers and the latter is measured by the formal health care expenditure. This task, however, poses a number of difficulties. The first is that the number of the family caregivers is an endogenous count regressor. The second is that there are too many zeros in the count (85%). The third is that the response variable also has a nontrivial proportion of zeros (14%). This paper overcomes these problems by combining 'control function approach', 'zero-inflated' counts, and a semiparametric estimator for censored models. The resulting procedure avoids strong parametric assumptions and behaves well computationally. Our main empirical finding is that informal family health care has a large substitute effect for diabetics and that there are also weak evidences that informal family health care has substitute effects for high blood pressure and mental diseases.

Original languageEnglish
Pages (from-to)1119-1133
Number of pages15
JournalHealth Economics (United Kingdom)
Volume21
Issue number9
DOIs
Publication statusPublished - 2012 Sep

Keywords

  • censored model
  • control function
  • count variable
  • formal health care
  • informal health care
  • zero-inflated Poisson

ASJC Scopus subject areas

  • Health Policy

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