Comments on Formal Home Health Care, Informal Care, and Family Decision Making

by David Byrne, Michelle S. Goeree,

Bridget Hiedemann and Steven Stern

Denis Beninger

European Conference on Long-Term Care

ZEW Mannheim, October 21-22 2005

What’s the paper about?

• Consumption + formal care• Time: informal care, leisure, work (c)

Parent 1 Parent 2

Child 2Child 1 Sp 1 Child 3Sp 2 Sp 3

“takes care of”

• Nash game (parents <-> children)

• Elderly care (informal care, formal care)

• Behavioral parameters?

Positive aspects

• Well written • Ambitious• Innovative theoretical model• Estimations are properly done (very

complex…)• Simulation of effects due to policy

change• Appropriate data

General comment: Identification of the household behavior

• Information only on aggregate consumption at household level

Players are the couples and not the individuals

• Time use is not very detailed• No information on household production

(cleaning, cooking,…) An essential aspect is missing to understand

relations within and between the couples

Remarks (1)

• Nash Game (NG):– NG may lead to non-unique solutions

The solution is unique in the paper.Have you set restrictions to guarantee uniqueness?

– Solution of NG may be a conflictual situation– NG is non cooperative suboptimal outcomes

but: caregiving ~ repeated game parents and children know each other

well– Testable restrictions for NG– Have you estimated alternative models?

Remarks (2)

• Specification of the utility function– Log-linear (matters of simplicity?)– No cross terms

Remarks (3)

• Definition of the relations within the couples– Couples ‘Children + Sp’ are “unitary”– When separate preferences for parents,

the allocation rule of the resources between the parents is very simple (each one receives the half)

– Father and mother are both Nash-playersmore structure on the intra-household

decision process in the parental couple would be useful

Other points

• ‘Subjective’ variables (happiness, satisfaction): – Relation between parents and children

“How close are you to your children / parents?”– Opinion on caregiving

“Do you find normal to take care for your parents?”

• Linearization of the budget constraint at optimum

• Definition of the budget constraint

• Work in progress