Choice Inconsistencies among the Elderly: Evidence from Plan Choice in the Medicare Part D Program: Reply
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aer.20151318.pdf
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Author(s)
Abaluck, Jason Todd
Gruber, Jonathan
Date Issued
December 2016
Journal
American Economic Review
Publisher
American Economic Association
Citation
Abaluck, Jason, and Jonathan Gruber. “Choice Inconsistencies Among the Elderly: Evidence from Plan Choice in the Medicare Part D Program: Reply.” American Economic Review 106, no. 12 (December 2016): 3962–3987. © American Economic Association
Version
Final published version
Abstract
We explore the in- and out-of-sample robustness of tests for choice inconsistencies based on parameter restrictions in parametric models, focusing on tests proposed by Ketcham, Kuminoff, and Powers (2016). We argue that their nonparametric alternatives are inherently conservative with respect to detecting mistakes. We then show that our parametric model is robust to KKP's suggested specification checks, and that comprehensive goodness of fit measures perform better with our model than the expected utility model. Finally, we explore the robustness of our 2011 results to alternative normative assumptions highlighting the role of brand fixed effects and unobservable characteristics.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/AER.20151318
