Total Offset and Medical Net Discount Rates: 1981–2012
Medical net discount rates (MNDRs) are calculated using monthly data for the period 1981:01–2012:06 based on the medical consumer price index and annual percentage yields based on 3-month, 6-month and 1-year U.S. Treasury Securities. Stationarity is tested for each series and the results of time-series analytics through 2000:05 are compared to previously published results (Ewing, Payne and Piette, 2001) that omitted Treasury Securities of shortest duration. The various series are extended to 2012:06 and the time series properties are examined. Although the results are mixed, they are more supportive of total offset (i.e., a zero MNDR) than previously published research findings have been.Abstract
MNDRs with 3-Month, 6-Month, & 1-Year Treasury Securities
Contributor Notes
*David Schap, Professor of Economics, Department of Economics, College of the Holy Cross, Worcester, MA.
Lauren Guest, College of the Holy Cross, Class of 2013.
Andrew Kraynak, College of the Holy Cross, Class of 2012. The authors thank Jonathan Shefftz as well as anonymous referees and editors of the Journal for their comments and help. Robert Baumann rendered generous and vital econometric assistance. Financial assistance from the May and Stanley Smith Charitable Trust is gratefully acknowledged.