PAM 4380 february 18 - Outline: 2/18/2011 2.2 Empirical...

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Outline: 2/18/2011 2.2 Empirical methods Structural econometrics Re-visiting the IV estimate of catheterization A simple structural model of catheterization An almost structural model of health lifestyles (Kenkel 1995) Next: Prohibtions Reading: PRELIM #1: March 4
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IV estimate, re-visited “The observational data we used can tell us nothing about the effect of catheterization in the other 93% of the population. This 93% falls in the category of either ‘would always have received a catheterization no matter how distant’ or ‘would never have received a catheterization no matter how close’ so there is no useful variation in the observational data with which to estimate an effect.” “In short, the -6.9% estimate … is an estimate of a marginal effect, namely the effect (on average) of increasing the catheterization rate in a population from 19.5% to 26.2%.” Could add: “among those over 65, in 1987, in the U.S.”
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Extrapolating … “The procedure could have a very substantial beneficial effect on others in the population, presumably those who would have received it irrespective of their location.” Newhouse & McClellan implicitly have a model in mind, where physicians assign the treatment (the cath) to patients who benefit the most, so only in “close calls” will distance influence whether the patient receives a cath Structural econometrics: systematic use of explicit
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PAM 4380 february 18 - Outline: 2/18/2011 2.2 Empirical...

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