TY  - JOUR
AB  - Copyright © 2016 John Wiley & Sons, Ltd. Micro panels characterized by large numbers of individuals observed over a short time period provide a rich source of information, but as yet there is only limited experience in using such data for forecasting. Existing simulation evidence supports the use of a fixed-effects approach when forecasting but it is not based on a truly micro panel set-up. In this study, we exploit the linkage of a representative survey of more than 250,000 Australians aged 45 and over to 4 years of hospital, medical and pharmaceutical records. The availability of panel health cost data allows the use of predictors based on fixed-effects estimates designed to guard against possible omitted variable biases associated with unobservable individual specific effects. We demonstrate the preference towards fixed-effects-based predictors is unlikely to hold in many practical situations, including our models of health care costs. Simulation evidence with a micro panel set-up adds support and additional insights to the results obtained in the application. These results are supportive of the use of the ordinary least squares predictor in a wide range of circumstances. Copyright © 2016 John Wiley & Sons, Ltd.
AU  - Fiebig, DG
AU  - Johar, M
DA  - 2017/01/01
DO  - 10.1002/for.2409
EP  - 15
JO  - Journal of Forecasting
PY  - 2017/01/01
SP  - 1
TI  - Forecasting with Micro Panels: The Case of Health Care Costs
VL  - 36
Y1  - 2017/01/01
Y2  - 2026/05/21
ER  -