Christian Pfarr

I feel good! Gender differences and reporting heterogeneity in self-assessed health

For empirical analysis and policy-oriented recommendations, the precise measurement of individual health or well-being is essential. The difficulty is that the answer may depend on individual reporting behaviour. Moreover, if an individual’s health perception varies with certain attitudes of the respondent, reporting heterogeneity may lead to index or cut-point shifts of the health distribution, causing estimation problems. An index shift is a parallel shift in the thresholds of the underlying distribution of health categories. In contrast, a cut-point shift means that the relative position of the thresholds changes, implying different response behaviour. Our paper aims to detect how socioeconomic determinants and health experiences influence the individual valuation of health. We analyse the reporting behaviour of individuals on their self-assessed health status, a five-point categorical variable. Using German panel data, we control for observed heterogeneity in the categorical health variable as well as unobserved individual heterogeneity in the panel estimation. In the empirical analysis, we find strong evidence for cut-point shifts. Our estimation results show different impacts of socioeconomic and health-related variables on the five categories of self-assessed health. Moreover, the answering behaviour varies between female and male respondents, pointing to gender-specific perception and assessment of health. Hence, in case of reporting heterogeneity, using self-assessed measures in empirical studies may be misleading and the information needs to be handled with care.

Anreizeffekte und Angebotsinduzierung im Rahmen der Riester‐Rente: Eine empirische Analyse geschlechts‐ und sozialisationsbedingter Unterschiede

Abstract In 2001, the voluntary Riester pension scheme was implemented in Germany. Financial subsidies should provide incentives to increase private pension savings. In this paper, we hypothesize that these publicly subsidized savings are mainly driven by the incentives of child benefits and that supplier induced demand is an important factor. Using data from the Socio-economic Panel we analyze the key determinants in the choice of a Riester-pension. We find a higher probability to sign a Riester contract for those with higher income, higher education and children. Furthermore, we show that a contact with an insurance agent in the previous year is a major factor for the possession of a Riesterpension. Separate estimations regarding gender and socialization confirm our hypothesis of heterogeneous determinants.

Estimating ordered categorical variables using panel data: a generalized ordered probit model with an autofit procedure

Estimation procedures for ordered categories usually assume that the estimated coefficients of independent variables do not vary between the categories (parallel-lines assumption). This view neglects possible heterogeneous effects of some explaining factors. This paper describes the use of an autofit option for identifying variables that meet the parallel-lines assumption when estimating a random effects generalized ordered probit model. We combine the test procedure developed by Richard Williams (gologit2) with the random effects estimation command regoprob by Stefan Boes.

Reporting heterogeneity in self-assessed health among elderly Europeans.

IntroductionSelf-assessed health (SAH) is a frequently used measure of individuals’ health status. It is also prone to reporting heterogeneity. To control for reporting heterogeneity objective measures of true health need to be included in an analysis. The topic becomes even more complex for cross-country comparisons, as many key variables tend to vary strongly across countries, influenced by cultural and institutional differences. This study aims at exploring the key drivers for reporting heterogeneity in SAH in an international context. To this end, country specific effects are accounted for and the objective health measure is concretized, distinguishing effects of mental and physical health conditions.MethodsWe use panel data from the SHARE-project which provides a rich dataset on the elderly European population. To obtain distinct indicators for physical and mental health conditions two indices are constructed. Finally, to identify potential reporting heterogeneity in SAH a generalized ordered probit model is estimated.ResultsWe find evidence that in addition to health behaviour, health care utilization, mental and physical health condition as well as country characteristics affect reporting behaviour. We conclude that observed and unobserved heterogeneity play an important role when analysing SAH and have to be taken into account.

Einkommen, Mobilität und individuelle Präferenzen für Umverteilung

Whereas the supply of redistribution is relatively easy to measure, the determinants of the demand for redistribution are controversially discussed in the international literature. In this study, Christian Pfarr aims at eliciting preferences for redistribution in Germany with the help of a decision experiment (Discrete Choice Experiment), based on a representative sample. (Published in German.)

Reporting Heterogeneity in Self-Assessed Health Among Elderly Europeans: The Impact of Mental and Physical Health Status

Self-assessed health (SAH) is a frequently used measure of individuals’ health status. It is also prone to reporting heterogeneity. To control for reporting heterogeneity valid measures of the objective health status are needed. The topic becomes even more complex for cross-country comparisons, as many key variables tend to vary strongly across countries, influenced by cultural and institutional differences. This study aims at exploring the key drivers for reporting heterogeneity in SAH in an international context. To this end, country specific effects are accounted for and the objective health measure is concretized, separating out effects of mental and physical health conditions. We use panel data from the Survey of Health, Ageing and Retirement in Europe (SHARE) which provides a rich dataset on the elderly European population. To obtain distinct indicators for physical and mental health conditions two indices were constructed. Finally, to identify potential reporting heterogeneity in SAH a generalized ordered probit model is estimated. We find evidence that health behaviour as well as health care utilization, mental and physical health condition as well as country characteristics affect reporting behaviour. We conclude that observed and unobserved heterogeneity play an important role when analysing SAH and have to be taken into account.

Meltzer-Richard and Social Mobility Hypothesis: Revisiting the Income-Redistribution Nexus Using German Choice Data

Whereas the supply of redistribution is relatively easy to measure, the determinants of the demand for redistribution are controversially discussed in international literature. Economic theory typically models redistribution as the result of a voting mechanism; this is only inadequately reflected by the existing empirical studies. In general, these studies use survey data and are therefore not able to predict individuals’ decision making under the restriction of a budget constraint. This study aims at eliciting preferences for redistribution in Germany with the help of a Discrete Choice Experiment (DCE), based on a representative sample of 1,538 individuals. A DCE solves the aforementioned problems by forcing individuals to overcome trade-offs. The results show a strong preference for redistribution that overshoots the current level. Considering socio-demographic characteristics, the results contradict the Meltzer-Richard-Model and the POUM hypothesis, while Piketty’s learning model is strongly supported by the data.

Redistribution through social health insurance: evidence on citizen preferences

The extent of social health insurance (SHI) and supplementary private insurance is frequently analyzed in public choice. Most of these analyses build on the model developed by Gouveia (1997), who defines the extent of SHI as consequence of a choice by self-interested voters. In this model, an indicator reflecting individuals’ relative income position and relative risk of falling ill determines the voting decision. Up to now, no empirical evidence for this key assumption has been available. We test the effect of this indicator on individuals’ preferences for the extent of SHI in a setting with mandatory SHI that can be supplemented by private insurance. The data is based on a DCE conducted in the field with a representative sample of 1538 German citizens in 2012. Conditional logit and latent class models are used to analyze preference heterogeneity. Our findings strongly support the assumptions of the models. Individuals likely to benefit from public coverage show a positive marginal willingness to pay (MWTP) for both a shift away from other beneficiary groups toward the sick and an expansion of publicly financed resources, and the expected net payers have a negative MWTP and prefer lower levels of public coverage.

The Political Economics of Social Health Insurance: The Tricky Case of Individuals’ Preferences

Social health insurance systems can be designed with different levels of state involvement and varying degrees of redistribution. In this article we focus on citizens’ preferences regarding the design of their health insurance coverage including the extent of redistribution. Using a microeconomic model we hypothesize that the individual’s preferred options are determined by the relative income position and the relative risk of falling ill. Only individuals who expect to realize a net profit through the implicit redistributive transfers will favour a public insurance coverage over a private one. We test this hypothesis empirically using three dis-tinct approaches. The first two are based on survey questions focusing on the type of coverage and the degree of redistribution respectively. The third is based on a discrete choice experiment thus accounting for trade-offs and budget constraints. The data is from a representative sample of 1.538 German individuals who were surveyed and participated in the DCE in early 2012. We find that the model has to be rejected. There is a wide consensus that redistributive elements should be an integral part of the social health insurance system and could even be extended. However, there are also preferences for health insurance coverage that can be individually optimized.

Discrete-Choice-Experimente zur Ermittlung der Präferenzen für Umverteilung

As in most industrialized countries, the inequality regarding the distribution of household incomes in Germany has steadily increased. By collecting taxes and granting monetary transfers, the government tries to affect the personal distribution of incomes. Whereas the supply of redistribution is relatively easy to determine, it is rather difficult to identify the determinants of the citizens′ demand for redistribution. Most of the literature concerning the individuals′ preferences for redistribution relies on survey based analysis. A shortcoming of these studies is the failure of imposing a budget constraint. Discrete-Choice-Experiments (DCE) solve this problem by forcing individuals to take the consequences of their decisions with respect to their own income into account. This study aims at developing a theory based approach to elicit individuals′ preferences for redistribution using DCEs. For the specific case of Germany, we show how to design and implement such a DCE. In particular, we discuss how the price attribute in a DCE should be specified and which levels adequately define the price an individual is willing to pay for redistribution. We are able to demonstrate that even for a highly complex topic such as redistribution a correctly applied DCE can provide authoritative results. This allows deriving policy implications on how to design redistributive policies which are in line with citizens’ preferences.