Does Health Insurance Decrease Health Expenditure Risk in Developing Countries? The Case of China

Juergen Jung and Jialu Liu ()
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Jialu Liu: Department of Economics, Allegheny College

No 2011-04, Working Papers from Towson University, Department of Economics

Abstract: We make use of panel data from the China Health and Nutrition Survey between 1991 and 2006 to investigate whether health insurance increases out-of-pocket (OOP) health expenditure risk. We find that health insurance increases the probability of catastrophic OOP health expenditures using a series of Probit models. We then use two-part as well as sample selection models to account for selection on unobservable variables and find that although the probability of positive OOP health expenditures increases with the availability of health insurance, the actual level of OOP health expenditures decreases. More specifically, we find that for a per- son with positive OOP health expenditures, having health insurance reduces the level of OOP expenses by 12.56 percent while controlling for selection effects.

Keywords: health insurance; exposure to health risk; health care in China; out-of-pocket health expenditure in China; two-part model; bivariate sample selection model; Heckman two- step estimator; China Health and Nutrition Survey (CHNS). (search for similar items in EconPapers)
JEL-codes: C33 C34 I11 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2011-04, Revised 2014-04
New Economics Papers: this item is included in nep-agr, nep-dev, nep-hea, nep-ias, nep-mfd and nep-tra
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http://webapps.towson.edu/cbe/economics/workingpapers/2011-04.pdf First version, 2011 (application/pdf)

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Journal Article: Does health insurance decrease health expenditure risk in developing countries? The case of China (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:tow:wpaper:2011-04

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