VIII. GAPS IN THE LITERATURE
Since the HIE, an extensive literature has emerged using more recent data and improved
statistical techniques to estimate the price and income elasticity of demand for health insurance
and health care services. As a result, we know much more about consumers’ response to
changes in the price of health insurance and certain health care services than we did 30 years
ago, especially with respect to differences in the demand for coverage among employers,
elasticity—whether related to data or methodological limitations, knowledge about certain
products or subpopulations, or applications for policy simulation. This chapter summarizes the
major gaps identified in our review of the literature. Filling any or all of these gaps could offer
great value to policymakers both by improving the science of elasticity estimation and by
supporting better policy analysis and evaluation.
A. DATA AND METHODS
As discussed in the previous chapters, a number of methodological challenges have made
elasticity estimation difficult. Although researchers have developed sophisticated econometric
techniques to address some of these challenges, more could be done in three fundamental areas
to improve the precision of elasticity estimates.
Expand Current Surveys to Accommodate Linking Data
Assembling data that contain full price and income information as well as an accurate and
complete set of other factors that affect demand is a fundamental condition for improving
estimates of the elasticity of demand for either health insurance or health care services.
Currently, no single data source obtains information for all of the parties to decisions about
health insurance or health care use: individuals and their families, employers, providers, and 65