Umeå Economic Studies,
Umeå University, Department of Economics

Abstract: This thesis consists of four papers, all of which are concerned with the demand for and consumption of dental care services.

In Paper [I] the presence of supplier induced demand is studied in the Swedish market for dental care. A two-part, hurdle model is used to capture the fact that the decision whether or not to visit a dentist, and the decision on how many times to visit a dentist, may be governed by different processes. In the analysis, we account for the distinction between dentists working within the National Dental Service and private practitioners, as potentially they have different incentives regarding supplier induced demand. We find evidence of supplier induced demand among private practitioners in the Swedish market for dental care.

In Paper [II], the choice of not visiting, or of making one or more visits to a dentist in 1973, 1980 and 1990 is studied. In 1973 there was no dental insurance, and there were different insurance regimes in 1980 and 1990. Separate models are estimated for the three years. In all three years it is found that the probability of visiting a dentist increases with income and years of education, and that women are more likely to visit a dentist than men. We can also conclude that there has been structural change in the probability of visiting a dentist for the period under scrutiny.

In Paper [III] the number of visits to a dentist is analyzed for a sample of adult Swedes. Particular interest is in the long term effect of regular visits to a dentist during childhood and adolescence. The data used contain many zeros and, because of the nature of the institutional framework, many one time visits. The zero-inflated Poisson model is extended to a zero-and-one-inflated Poisson. For those with healthy teeth, the visiting habits during childhood and adolescence have no significant effect on the number of visits to a dentist as an adult. For those with problematic teeth, the visit frequency to a dentist as an adult is reduced by about 18 percent if regular visits to a dentist are made during the individual's youth.

Paper [IV] studies the design of an optimal insurance scheme with an application to the Swedish dental insurance system in 1993. In Sweden, dental health has improved since the 1974 reform of the dental insurance system. The cost for dental insurance, which in Sweden is financed through taxes and social insurance fees, is nevertheless still high. In this paper, we formulate a non-linear dental insurance scheme financed through premium payments and compare individuals' expected utility in this system to the expected utility in the Swedish dental insurance system from 1993.

Keywords: Supplier Induced Demand; Dental Visits; Dental Health; Dental Insurance; Moral Hazard; Count Data

JEL-codes: D82; I19

101 pages, January 29, 1999

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