Econometric modelling of the Australian Health Insurance industry : size/scale economies

This study examines the Australian Health Insurance system to determine if economies of size/scale exist using data corresponding to the period immediately after substantial changes to the system.

A number of possible measures of output are examined, a number of possible functional forms considered and a rigorous statistical testing procedure applied. The emphasis on the testing of models is considered in the light of the small sample sizes encountered and appropriate small sample statistical tests adopted for this study.