New Estimates of the Demand for Physical and Mental Health Treatment

This article estimates health-care demands by calculating expected end-of-year prices and incorporating them into a zero-inflated ordered probit model applied to several overlapping panels of data from 1996 to 2003.  The authors found that the price responsiveness of ambulatory mental health treatment has decreased substantially and is now slightly lower than physical health treatment, suggesting that concerns over moral hazard alone do not warrant less generous coverage for mental health. 

Meyerhoefer, C. D. and S. H. Zuvekas (2009). New estimates of the demand for physical and mental health treatment. Health Economics. [epub ahead of print] http://www.ncbi.nlm.nih.gov/pubmed/19350688