Identifying demand for health resources using waiting times information

In this paper the differences in average waiting times are utilized to iden tify the determinants of demand for health services. The equilibrium waitin g time framework is used, but the full equilibrium assumption is relaxed by selecting areas with low waiting times and by estimating a (semi-)parametr ic selection model. Determinants of supply are used as instruments for the endogeneity of waiting times. A model for the demand for acute services at the ward level in the UK is estimated. The model estimates, and their impli cations for health service allocations in the UK, are contrasted against mo re standard allocation models. The present results show that it is critical ly important to account for rationing by waiting times when identifying nee ds from care utilization data. Copyright (C) 2000 John Wiley & Sons, Ltd.