Is health care really a luxury?

Much of the work which has led to a widely held view that the income elasticity of health care spending exceeds one has been based on international cross-section data, or on pooled cross-sections and time series. In this paper we re-examine this view in the context of long-run equilibrium relationships between non-stationary time series, possibly including autonomous trends. Our results east doubt upon the usefulness of pooling and upon the notion of an elasticity above one

Unbiased Estimation of the MSE Matrix of Stein-Rule Estimators, Confidence Ellipsoids, and Hypothesis Testing

We first present an unbiased estimator of the MSE matrix of the Stein-rule estimator of the coefficient vector in a normal linear regression model. The Steinrule estimator can be used with both its estimated MSE matrix and with the least-squares MSE matrix to form confidence ellipsoids. We derive the approximate expected squared volumes and coverage probabilities of these confidence sets and discuss their ranking. These results can be applied to the conditional prediction of the mean of the endogenous variable. We also consider the power of F -tests which employ the Stein-rule estimator in place of the least-squares estimator.

GEE estimation of the covariance structure of a bivariate panel data model with an application to wage dynamics and the incidence of profit-sharing in West Germany

GEE, Two-equation panel data model, Covariance structure, Real wages, Variable pay,