*2.2.2 Independent variables*

Independent variables are grouped into five categories—demographic, socioeconomic, marital status, health status, related behavior, and insurance status. These variables are described in **Table 1**.

### **2.3 Quantitative analysis**

The model to be estimated in this analysis is written as follows:

$$\text{VHI}\_{i}\,^{\text{\*}} = \text{constant} \, + \, \beta\_{i} \text{X}\_{i} + \, \varepsilon\_{i} \, and \begin{cases} \text{1} \text{if } \forall \text{H} \, \text{l}\_{i}^{\*} \ge \text{0} \\ \text{0} \text{if } \forall \text{H} \, \text{l}\_{i}^{\*} < \text{0}. \end{cases} \tag{1}$$

where VHI\* is the latent dependent variable, VHI is the observable dependent variable, βi's are the coefficients to be estimated, Xi's are the independent variables, and εi is the residual.


*Voluntary Private Health Insurance Demand by Older People in a National Health Service… DOI: http://dx.doi.org/10.5772/intechopen.105100*

#### **Table 1.**

*Description of independent variables.*

The dependent variable expresses whether the respondent has voluntary health insurance. The binary nature of this variable implies that the econometric method of estimation is a probit. The estimated coefficients provide the direction of the relation between independent and dependent variables. The computation of the marginal effects allows the comparison of the intensity of the estimated coefficients. The

marginal effects provide information on how the probability of having VHI changes when there is a unit change in the independent variable.

The results are obtained using Stata 15 econometric software.
