Medical consumption over the life cycle: facts from a U.S. medical expenditure panel survey

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Medical Consumption over the Life Cycle Facts from a U.S. Medical Expenditure Panel Survey.pdf (1.41 MB)

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https://ideas.repec.org/p/tow/wpaper/2010-09.html

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http://hdl.handle.net/11603/10770

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Towson University Department of Economics Working Paper Series

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Author/Creator ORCID

Date

2010

Type of Work

working papers
Text
application/pdf

Department

Towson University. Department of Economics

Program

Citation of Original Publication

Juergen Jung & Chung Tran, 2010. "Medical Consumption over the Life Cycle: Facts from a U.S. Medical Expenditure Panel Survey," Working Papers 2010-09, Towson University, Department of Economics, revised Mar 2013.

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Subjects

Life-cycle profiles
Time effects
Cohort effects
Partial linear seminonparametric models
Pseudo panels
Medical Expenditure Panel Survey (U.S.)

Abstract

We investigate the association between age and medical spending in the U.S. using data from the Medical Expenditure Panel Survey (MEPS). We estimate a partial linear seminonparametric model and construct “pure” life-cycle profiles of health spending simultaneously controlling for time effects (i.e. institutional changes and business cycles effects) and cohort effects (i.e. generation specific conditions). We find that time and cohort effects introduce a significant estimation bias into predictions of health expenditures per age group, especially for individuals older than 60 years. The estimation biases introduced by cohort effects increase monotonically with age while time effects are non-monotone. Overall, cohort effect biases dominate time effect biases in magnitude for high age groups.