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Despite more complete specification of econometric models, the range of data sources (each

with its own advantages and problems) still contributes to differences in estimates of elasticity.

The most common source of data used to estimate elasticity is the CPS. Conducted by the

Census Bureau, this survey offers multiple years of data (allowing the researcher to control for

many changes over time) and a large number of observations in each year. However, it is not a

panel survey: most of the population sample changes from year to year.24 Furthermore, the CPS

offers information only about whether household members are covered, not information about

the cost or design of their coverage.

The Medical Expenditure Panel Survey (MEPS) conducted by AHRQ does provide panel

data, although it relies on a much smaller sample than CPS. MEPS includes information about

employees’ insurance options and coverage (such as premiums and coinsurance rates), as well as

personal information (such as income and assets, health status, and health care utilization and


Many researchers have tried to link CPS across years or statistically match CPS to MEPS to

cobble together a dataset adequate to their research needs—to estimate the elasticity of demand

for health insurance and health care services reliably and on an ongoing basis. To directly

address this need would require a conducting a national panel survey like MEPS, but for a larger

sample of the population and released on a faster schedule. The importance of state-level

regulation and geographic differences in medical practice would suggest that both the design and

size of the sample must be sufficient to support at least periodic estimates at the state level.


The CPS uses a rotational sample design. The overlapping sample in the March sample is one-third of the

full sample. However, it is not intended (nor is it weighted) to be used as a panel.

25Many early studies of elasticity relied on the predecessor surveys to MEPS:

the National Medical

Expenditure Survey (NMES) and the National Medical Care Utilization and Expenditure Survey (NMCUES).


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