Structural Estimation of Psychiatric Hospital Stays

This paper develops and estimates a structural model to explain lengths of stay of psychiatric patients as the joint decision of patients and caregivers. The hazard rates are estimated using Weibull specifications for the duration dependence and a multivariate version of the Gamma distribution to allow for unobserved and correlated heterogeneity. The main results indicate that the hazard rate for the caregivers' is increasing while that for the patients' is decreasing. Moreover, the older the patient is, the lower is the hazard rate for both patients and caregivers. This model can also be applied to many retirement and aging decisions including: time to retirement between spouses, financial planning, and health related retirement decisions.