Expectations among the elderly about nursing home entry.
OBJECTIVE
To assess whether the covariates that explain expectations of nursing home entry are consistent with the characteristics of those who enter nursing homes.


METHODS
Waves 1 and 2 of the Assets and Health Dynamics Among the Oldest Old (AHEAD) survey.


METHODS
We model expectations about nursing home entry as a function of expectations about leaving a bequest, living at least ten years, health condition, and other observed characteristics. We use an instrumental variables and generalized least squares (IV-GLS) method based on Hausman and Taylor (1981) to obtain more efficient estimates than fixed effects, without the restrictive assumptions of random effects.


RESULTS
Expectations about nursing home entry are reasonably close to the actual probability of nursing home entry. Most of the variables that affect actual entry also have significant effects on expectations about entry. Medicaid subsidies for nursing home care may have little effect on expectations about nursing home entry; individuals in the lowest asset quartile, who are most likely to receive these subsidies, report probabilities not significantly different from those in other quartiles. Application of the IV-GLS approach is supported by a series of specification tests.


CONCLUSIONS
We find that expectations about future nursing home entry are consistent with the characteristics of actual entrants. Underestimation of risk of nursing home entry as a reason for low levels of long-term care insurance is not supported by this analysis.
Lindrooth
R C
RC
Institute for Health Services Research and Policy Studies, Northwestern University, Evanston, IL 60208-4170, USA.
Hoerger
T J
TJ
Norton
E C
EC
D000203:Activities of Daily Living; D000368:Aged / Q000523:psychology*; D001294:Attitude to Health; D003627:Data Interpretation, Statistical; D015987:Effect Modifier, Epidemiologic; D005260:Female; D015577:Geriatric Assessment; D019538:Health Care Surveys; D006302:Health Services Research; D006304:Health Status; D006707:Homes for the Aged / Q000706:statistics & numerical data*; D006801:Humans; D016018:Least-Squares Analysis; D008136:Longevity; D008297:Male; D008484:Medicaid; D009735:Nursing Homes / Q000706:statistics & numerical data*; D010343:Patient Admission; D011336:Probability; D012307:Risk Factors; D011795:Surveys and Questionnaires; D014481:United States / Q000453:epidemiology