The economics of dental care utilization

The size of the dental care market is large and an accurate understanding of the characteristics of consumer demand for and utilization of dental care is important. Expenditures for professional dental services in 2001 were {dollar}64.5 billion, and although the market is large, intertemporal substitution and contemporaneous intra-factor substitution effects remain largely unexplored in the economics of dental care utilization. This dissertation seeks to model the individual's decision to utilize dental services broadly characterized as cosmetic, restorative and preventive over time as well as the inter-relationships among these three categories of services.; Previous studies of dental care utilization have implicitly assumed the decision to consume cosmetic, restorative and preventive services were made independently. Previous studies that have not included a dynamic component to models of utilization have implicitly assumed that there are no time dependent patterns in dental procedure consumption. We relax these assumptions and specify a dynamic multivariate Probit model that allows the probability of simultaneous decisions on utilization of the three types of dental care services to be modeled with a dynamic structure.; Data are taken from the National Medical Expenditure Survey of 1987 and its Dental Supplement. The NMES is an individually aggregated survey including detailed information on utilization, demographic, health status, out-of-pocket costs and insurance coverage for 38,446 individuals in 1987. Daily utilization of dental care is aggregated quarterly and estimates suggest a positive relationship between current and past dental utilization within the same type of service. The cross-equation intertemporal relationship between past utilization and the utilization of a different type of service have a negative value for previous cosmetic utilization and a positive value for previous restorative and preventive utilization. The hypothesis that utilization of dental care is associated with reduced future utilization cannot be entertained. The residual correlations from the model estimates also suggest that the choice of utilizing one type of procedure is significantly related to the utilization of other types of procedures contemporaneously. Preventive and Restorative utilization are complements but Cosmetic and Preventative and Cosmetic and Restorative are substitutes...