Share
Explore BrainMass

Income Elasticity of the Demand for Medical Care

Have this regression with the following results:

y Coef. Std. Err. t P>t [95% Conf. Interval]

age -.0313208 .0048588 -6.45 0.000 -.0408444 -.0217972
age2 .0005537 .0000652 8.50 0.000 .000426 .0006815
black -.9694474 .0396784 -24.43 0.000 -1.04722 -.8916744
female .4468672 .0279172 16.01 0.000 .3921472 .5015872
child -.6196008 .062625 -9.89 0.000 -.7423509 -.4968507
educdec .0215436 .0053945 3.99 0.000 .0109699 .0321172
inc .0000364 3.85e-06 9.45 0.000 .0000289 .000044
fam -.0413412 .008681 -4.76 0.000 -.0583566 -.0243258
disea .0372654 .0022947 16.24 0.000 .0327675 .0417632
physlm .4972644 .0470732 10.56 0.000 .4049971 .5895317
xghindx -.0098738 .0010987 -8.99 0.000 -.0120275 -.0077202
lpi .0372634 .0062391 5.97 0.000 .0250343 .0494926
idp -.8570641 .0403933 -21.22 0.000 -.9362384 -.7778899
fmde .0363482 .010724 3.39 0.001 .0153284 .0573681
logc -.2930233 .0191652 -15.29 0.000 -.3305887 -.255458
_cons 3.96673 .1417782 27.98 0.000 3.688833 4.244627

I need some assistance interperting regression results:

variables that are important:

Y is the total of medical expenditures
inc is income
logc is coinsurance

what is the coinsurance (price) effect of the demand for medical care? is it statistically significant?

what is the income elasticity of the demand for medical care? is medical care a normal or inferior good?

Solution Preview

variables that are important: All the avriables with t > 1.96 or t<-1.96 are important at 5% significance level. Alternatively you can have a look at the P value. All variables with P<0.05 are important. In this output all the P values are <0.05, so all the mentioned variables are statistically ...

Solution Summary

This job evaluates income elasticity of the demand for medical care.

$2.19