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

Winfried Pohlmeier and Volker Ulrich
The Journal of Human Resources
Vol. 30, No. 2 (Spring, 1995), pp. 339-361
DOI: 10.2307/146123
Stable URL: http://www.jstor.org/stable/146123
Page Count: 23
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
An Econometric Model of the Two-Part Decisionmaking Process in the Demand for Health Care
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Abstract

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.

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