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Title:Do red herrings swim in circles?: controlling for the endogeneity of time to death PDF Logo
Authors:Felder, Stefan
Werblow, Andreas
Zweifel, Peter
Issue Date:2008
Series/Report no.:Ruhr economic papers 73
Abstract:Studies on the effect of ageing on health care expenditures (HCE) have revealed the importance of controlling for time-to-death (TTD). These studies, however, are subject to possible endogeneity if HCE influences remaining life expectancy. This paper introduces a ten year observational period on monthly HCE, socioeconomic characteristics, and survivor status to first predict TTD and then uses predicted values of TTD as an instrument in the regression for HCE. While exogeneity of TTD has to be rejected, core results concerning the role of TTD rather than age as a determinant of HCE (the red herring hypothesis) are confirmed.
Subjects:Health care expenditure
proximity to death
ageing
red herring hypothesis
JEL:I10
D12
ISBN:978-3-86788-077-0
Document Type:Working Paper
Appears in Collections:Ruhr Economic Papers, RWI
Publikationen von Forscherinnen und Forschern des RWI

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