On using sample selection methods in estimating the price elasticity of firms' demand for insurance

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Abstract

We evaluate a technique based on sample selection models that has been used by health economists to estimate the price elasticity of firms' demand for insurance. We demonstrate that, this technique produces inflated estimates of the price elasticity. We show that alternative methods lead to valid estimates. © 2002 Elsevier Science B.V. All rights reserved.

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Marquis, M. S., & Louis, T. A. (2002). On using sample selection methods in estimating the price elasticity of firms’ demand for insurance. Journal of Health Economics, 21(1), 137–145. https://doi.org/10.1016/S0167-6296(01)00110-2

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