Getting the Right Tail Right: Modeling Tails of Health Expenditure Distributions / Martin Karlsson, Yulong Wang, Nicolas R. Ziebarth.

Format:

Book

Author/Creator:

Karlsson, Martin.

Contributor:

National Bureau of Economic Research.

Wang, Yulong.

Ziebarth, Nicolas R.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31444.

NBER working paper series no. w31444

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

Health expenditure data almost always include extreme values. Such heavy tails can be a threat to the commonly adopted least squares methods. To accommodate extreme values, we propose the use of an estimation method that recovers the often ignored right tail of health expenditure distributions. We apply the proposed method to a claims dataset from one of the biggest German private health insurers and find that the age gradient in health care spending differs substantially from the standard least squares method. Finally, we extend the popular two-part model and develop a novel three-part model.

Notes:

Print version record

July 2023.