Table 3.

Two-Part Model and the implied Equilibrium Health Function.

	[1] Probit survival model	[2] Error Correction Model conditional on survival	[3] Equilibrium health function
Left hand side variable	SURVIVAL	ΔHEALTH	$h_s^{*}$
Explanatory variables	Coeff.	Coeff.	Coeff.
	Std error	Std error	Std error
ΔLNINCOME	–	0.00819***	–
		0.00237
ΔSMOKING	–	−0.00022	–
		0.00034
HEALTH99	2.03316***	−0.51034***	–
	0.23017	0.01340
LNINCOME99	0.07344	0.01623***	0.03179***
	0.06229	0.00274	0.00539
SMOKING99	−0.01485***	−0.00092***	−0.00181***
	0.00413	0.00021	0.00040
AGE99	0.02964**	0.00050	0.00098
	0.01315	0.00044	0.00080
AGESQ99	−0.00064***	−0.00002***	−0.00004***
	0.00011	0.00000	0.00001
MALE	−0.33276***	0.01456***	0.02854***
	0.06746	0.00270	0.00519
NONWHITE	0.11852	−0.00494	−0.00967
	0.14809	0.00391	0.00680
ADVEDUC	0.21339**	0.01048***	0.02054**
	0.09378	0.00397	0.00817
STDEDONLY	0.14268	0.01389***	0.02722***
	0.09265	0.00391	0.00811
Constant	0.63080	0.36988***	0.72478***
	0.42130	0.01552	0.02447
Sample size	9677	9078
Pseudo R2/R2	0.3656	0.2617
Wald χ2(9)	650.76***	–
F(11,398)	–	139.44***

Source: Authors’ calculations based on Eqs. (5a), (7) and (8), with the coefficient estimates in column [3] derived by manipulation of the estimation results in column [2]. Robust standard errors in columns [1] and [2] allow for the sample design. Bootstrapped standard errors in column [3] are based on 2000 replications. Statistical significance at 1%, 5% and 10% levels are denoted by ***, ** and *, respectively.