By Christine de la Maisonneuve & Joaquim Oliveira Martins

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Extra info for A PROJECTION METHOD FOR PUBLIC HEALTH AND LONG-TERM CARE EXPENDITURES ECONOMICS DEPARTMENT WORKING PAPERS No. 1048

Sample text

Overall, results confirm that the inclusion of a common trend significantly lowers the income elasticity (below one). 1. 1 AMA (1978) ≈0 Sunshine and Dicker (1987) ≈0 Manning et al. (1987) ≈0 Wedig (1988) ≈0 Wagstaff et al. (1991) ≤0 Hahn and Lefkowitz (1992) ≤0 AHCPR (1997) ≤0 Special / uninsured Falk et al. 3 Anderson et al. 4 Anderson et al. 2 Gerdtham et al. 6 Source: Getzen (2000). 49 ECO/WKP(2013)40 Potential bias in the estimation 94. The estimation of income elasticity may be biased for several reasons.

2). The new set of projections suggests a more important increase in health care expenditure, both in the cost-pressure and the cost-containment scenarios. This may be explained by the assumption of a stronger non-demographic, non-income effect, reflecting a better understanding of the evolution of the underlying determinants of the unexplained residual and a lower assumption on the income elasticity. Conversely, regarding public LTC funding, the increase in expenditure is lower in the new set of projections than in the previous one.

It is calculated as real GDP per worker in 2005 constant PPP USD. Participation rate 78. Participation rates are those underlying GDP projections and come from the OECD Economic Outlook No. , (2012). , 2003). The cohort approach assumes that the observed participation behaviour of individuals belonging to the most recent cohorts, such as the lower exit rates of current old-age workers relative to previous cohorts, or the higher entry rates of current young women relative to previous cohorts, will continue to apply to future cohorts as well.

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A PROJECTION METHOD FOR PUBLIC HEALTH AND LONG-TERM CARE EXPENDITURES ECONOMICS DEPARTMENT WORKING PAPERS No. 1048 by Christine de la Maisonneuve & Joaquim Oliveira Martins


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