Question

13 In this exercise, assume that the term admission in Table 2.15 refers to inpatient care, while any use refers to inpatient and outpatient care.

Table 2.15 contains a lot of information. Without looking at any specific values, summarize what type of data the table contains. Give an example of a broad ques tion about income levels and demand for health care that the table might have the potential to answer Table 2.15. Various measures of predicted annual use of medical services by income group Significance tests t on contrast of Income Lowest Middle Highest Middle vs. Highest third mean third mean third mean lowest thirds vs. lowest thirds Likelihood of any use (percent) Free Family pay 82.8 87.4 90.1 4.91 5.90 25 percent 50 percent 95 percent 80.1 76.2 68.9 84.8 82.3 73.8 5.45 4.35 3.96 6.28 4.86 4.64 64.7 Likelihood of one or more admissions (percent) Free Family pay 10.63 10.14 10.35 -0.91 -0.35 25 percent 50 percent 95 percent 10.03 9.08 8.44 8.06 7.38 7.97 7.77 7.07 -2.95 1.78 2.79 2.75 1.66 2.46 Expenses (1984 $) Free Family pay 788 736 809 1.78 0.53 25 percent 680 610 581 588 550 494 623 590 527 3.17 1.89 3.09 1.47 50 percent 95 percent -0.49 Note: Excludes dental and outpatient psychotherapy. Predictions for enrollment population carried forward for al years of the study The t-statistics are corrected for intertemporal and intrafamily correlation. The statistics test the null hypothesis that the mean of the middle (highest) third equals the mean of the lowest third; for example, the 4.91 figure implies we can reject at the 0.001 level the hypothesis that in the free plan the likelihood of any use for the lowest and middle thirds of the income distribution are equal. Source: Manning et al. (1987). Reprinted with permission from the American Economic Association.

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