TY  - JOUR
AU  - Deb,Partha
AU  - Trivedi,Pravin K.
AU  - Zimmer,David M.
TI  - Dynamic Cost-offsets of Prescription Drug Expenditures: Panel Data Analysis Using a Copula-based Hurdle Model
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15191
PY  - 2009
Y2  - July 2009
UR  - http://www.nber.org/papers/w15191
L1  - http://www.nber.org/papers/w15191.pdf
N1  - Author contact info:
Partha Deb
Hunter College
Department of Economics
695 Park Avenue
Room 1524 West
New York, NY 10065
Tel: 212/772-5435
Fax: 212/772-5398
E-Mail: partha.deb@hunter.cuny.edu

Pravin K. Trivedi
Department of Economics
Indiana University
Wylie Hall 105, 100 S. Woodlawn
Bloomington, IN 47405
E-Mail: trivedi@indiana.edu

David M. Zimmer
Department of Economics  Western Kentucky Universi
1906 College Heights Blvd. , Grise Hall 426
Bowling Green, Ky. 42101
E-Mail: david.zimmer@wku.edu
AB  - 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.
ER  -