Unbiased Analysis of Today's Healthcare Issues
Let us assume that there are two types of people: smart people an dumb people. Smart people’s test scores are normally distributed about 80% and dumb people’s tests scores are normally distributed about 40% on their test. If we observe the test score of one person, how do we know if they are smart or…
What is the effect a country’s GDP on health? What about the country’s literacy rate on infant mortality rates? Often researchers try to answer these questions using time-series data. With time series data, we have observations of a few units (e.g.: countries or individuals) over many years. Let the subscript i represent the the individual…
Most public health officials believe that increasing the supply of primary care doctors is almost always a good thing, while increasing the number of specialists can have mixed results. One problem is that physician supply is endogenous. One may believe that physicians prefer to locate in wealthier areas. If wealthier people are also healthier, then…
Randomized clinical trials (RCTs) are the “gold standard” for medical studies. Nevertheless, even RCTs have their problems. An NBER working paper by Ludwig, Marcotte and Norberg points highlights some of these issues. The authors examine whether or not anti-depressants reduce suicide rates (they find that anti-depressants do reduce suicide rates). Unfortunately, using data from RCTs…
Traditional instrumental variables (IV) econometric methodologies often fail to take into account response heterogeneity. Response heterogeneity based on characteristics not observed by the researcher can create a heterogeneity in the self-selection process. For instance, one group of people who elect to receive surgery may have knowledge of a family history where surgery is typically successful,…
Can we estimate risk aversion and prudence using a survey question for the general public? This is what a paper by Eisenhauer and Ventura attempts to do. Methods In the 1995 Survey of Italian Households’ Income and Wealth, one question asked: You are offered the opportunity of acquiring a security permitting you, with the same…
Today I will review the insightful lecture of Willard Manning at European Science Days. Manning is most famous for his work with the RAND Health Insurance Experiment. Problems with Healthcare Data There are 4 major econometric problems one must consider when trying to analyze health care cost and utilization data: There is a large mass…
The Nursing Home Compare website provides consumers with quality ratings of thousands of nursing homes (NHs) around the country. Are these ratings accurate? Could they be improved? This is the question which researchers Arling, Lewis, Kane, Mueller and Flood analyze in their 2007 HSR paper. The authors find 2 major flaws with the rankings: 1)…
One of the biggest advances statistical modeling in the last 30 years has been the use of the bootstrap. For those interested in learning about the bootstrap in more detail, a good place to start is an article by UCSD math professor Dimitris N. Politis which I will summarize here. For more detailed information, one…
Let us pretend you have a system of M equations, with N observations for each equation. For example, if we are estimating supply and demand independently over 20 years, M=2 and N=20. If each of the regressors is predetermined in each equation and we have an exclusion restriction, we can use the Seemingly Unrelated Regressions…