Health Econ. 2001 Apr; 10(3): 221-32.

Demand for traditional medicine in Taiwan: a mixed Gaussian-Poisson model approach.

Yen ST, Tang CH, Su SJ.

Department of Applied Economics and Statistics, University of Nevada, Reno, NV 89557-0105, USA. syen@unr.edu

Hurdle count models are used to examine the participation and consumption decisions in Chinese medicine use. Motivated by a household production model, a second censoring mechanism is introduced into existing single-hurdle models, and the resulting specification accommodates conscientious abstainers, as well as economic non-consumers, and admits excessive zeros in the sample. In contrast to previous studies that found few predictors, empirical results based on a Taiwanese national sample suggest that Western medicine is a gross substitute to Chinese medicine, and both time price and money price play more important roles than income. Insurance, lifestyle and demographics also determine the use of Chinese medicine.