Dow, William H. (1999). Flexible Discrete Choice Demand Models Consistent with Utility Maximization: An Application to Health Care Demand. American Journal of Agricultural Economics, 81(3)
To better understand the effects of health care policies, a considerable literature has developed to estimate the economic determinants of health care provider choice. One important goal of this literature has been the estimation of price elasticities of health care demand, particularly in rural areas of developing countries where debates continue regarding appropriate levels of user fees in government health facilities (World Bank). Accurate estimation of price elasticities is crucial to evaluating the trade-offs between health promotion and revenue generation in rural areas where poorly funded government clinics are often consumers' only accessible health care choices. However, the exact empirical implementation of demand estimation with discrete data has become a point of contention between researchers. Jimenez reviews studies of discrete choice health care demand in developing countries and concludes that the methods and results have been sufficiently varied so as to make general policy conclusions uncertain. The present paper resolves some sources of this uncertainty, while at the same time contributing to the larger methodological literature on discrete choice demand modeling.
American Journal of Agricultural Economics
Dow, William H.