The European Journal of Health Economics

, Volume 15, Issue 5, pp 533–551 | Cite as

Testing the red herring hypothesis on an aggregated level: ageing, time-to-death and care costs for older people in Sweden

  • Martin Karlsson
  • Florian KlohnEmail author
Original Paper


In this paper we test the ‘red herring’ hypothesis for expenditures on long-term care (LTC). The main contribution of this paper is to assess the ‘red herring’ hypothesis by using the probability of dying as a measure for time-to-death (TTD). In addition, we implement models that allow for age-specific TTD effects on LTC utilization as well as sex-specific effects. We also focus on total, institutional and domiciliary LTC separately. For our analysis we use high quality administrative data from Sweden. Our analysis is based on fixed effects estimates. We use our findings to project future LTC expenditures and show that, although TTD is a relevant predictor, age itself remains the main driver of LTC expenditures.


Mortality Long-term care Red herring 

JEL Classification

I10 H51 J14 C23 



We would like to thank participants of different events for excellent comments on previous versions of this paper: the Berlin Network of Labour Market Research, the 2010 NHESG conference in Umea, the 2010 DIBOGS Workshop in Neuss, the Actuarial Research Seminar at Cass Business School and the 2011 iHEA Congress in Toronto, participants of a research colloquium at the DZA in Berlin.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.Universität Duisburg-EssenEssenGermany

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