A Bayesian analysis of the OPES model with a nonparametric component: An application to dental insurance and dental care

Abstract

This paper analyzes the effect of dental insurance on utilization of general dentist services by adult US population aged from 25 to 64 years using the ordered probit model with endogenous selection. Our econometric framework accommodates endogeneity of insurance and the ordered nature of the measure of dental utilization. The study finds strong evidence of endogeneity of dental insurance to utilization and identifies interesting patterns of nonlinear dependencies between the dental insurance status and individual's age and income. The calculated average treatment effect supports the claim of adverse selection into the treated (insured) state and indicates a strong positive incentives effect of dental insurance.

Citation

Munkin, M.K. and Trivedi, P.K. (2008), "A Bayesian analysis of the OPES model with a nonparametric component: An application to dental insurance and dental care", Chib, S., Griffiths, W., Koop, G. and Terrell, D. (Ed.) Bayesian Econometrics (Advances in Econometrics, Vol. 23), Emerald Group Publishing Limited, Leeds, pp. 87-114. https://doi.org/10.1016/S0731-9053(08)23003-3