NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Dynamic Cost-offsets of Prescription Drug Expenditures: Panel Data Analysis Using a Copula-based Hurdle Model

Partha Deb, Pravin K. Trivedi, David M. Zimmer

NBER Working Paper No. 15191
Issued in July 2009
NBER Program(s):   HE

This paper presents a new multivariate copula-based modeling approach for analyzing cost-offsets between drug and nondrug expenditures. Estimates are based on panel data from the Medical Expenditure Panel Survey (MEPS) with quarterly measures of medical expenditures. The approach allows for nonlinear dynamic dependence between drug and nondrug expenditures as well as asymmetric contemporaneous dependence. The specification uses the standard hurdle model with two significant extensions. First, it is adapted to the bivariate case. Second, because the cost-offset hypothesis is inherently dynamic, the bivariate hurdle framework is extended to accommodate dynamic relationships between drug and nondrug spending. The econometric analysis is implemented for six different groups defined by specific health conditions. There is evidence of modest cost-offsets of expenditures on prescribed drugs.

download in pdf format
   (1452 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (1452 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w15191

Published: Health Economics Volume 23, Issue 10, pages 1242–1259, October 2014

Users who downloaded this paper also downloaded these:
Encinosa, Bernard, and Dor w15691 Does Prescription Drug Adherence Reduce Hospitalizations and Costs?
Shang and Goldman w13358 Prescription Drug Coverage and Elderly Medicare Spending
Rosenthal, Berndt, Donohue, Epstein, and Frank Demand Effects of Recent Changes in Prescription Drug Promotion
Dor and Encinosa w10738 How Does Cost-Sharing Affect Drug Purchases? Insurance Regimes in the Private Market for Prescription Drugs
Frank, McGuire, and Normand w12643 Cost-Offsets of New Medications for Treatment of Schizophrenia
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us