Zero inflation and over-dispersion issues can significantly affect the predicted probabilities as well as lead
to unreliable estimations in count data models. This paper investigates whether considering this issue for German
Socioeconomic Panel (1984-1995), used by Riphahn et al (2003), provides any evidence of misspecification in their
estimated models for the adverse selection and moral hazard effects. The paper has the following contributions:
first, it shows that estimated parameters for adverse selection and moral hazard effects are sensitive to the model
choice; second, the random effects panel data as well as standard pooled data models do not provide reliable
estimates for health care demand (doctor visits); third, it shows that by appropriately accounting for zero inflation
and over-dispersion there is no evidence of adverse selection behaviour and that moral hazard plays a positive and
significant role for the number of doctor visits. These results are robust for both males and femalesβ subsamples as
well as for the full data sample
