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Keywords:

  • hospital choice;
  • waiting time;
  • latent class model

SUMMARY

This paper applies latent-class multinomial logit models to the choice of hospital for cataract operations in the UK NHS. We concentrate on the effects of travel time and waiting time and especially on estimating the waiting time elasticity of demand. Models including hospital fixed effects rely on changes over time in waiting time to indentify coefficients. We show how using a latent-class multinomial logit model characterises the unobserved heterogeneity in GP practices' choice behaviour and affects the estimated elasticities of travel time and waiting time. The models estimate waiting time elasticities of demand of approximately −0.1, comparable with previous waiting time-demand models. For the average waiting time elasticity, the simple multinomial logit models are good approximations of the latent-class logit results. Copyright © 2011 John Wiley & Sons, Ltd.