Grossman has used a very different theoretical paradigm to describe the determinants
of health outcomes (Grossman, 2000). The empirical analysis of demand for health is
also complicated because of the fact that theoretical models often involve inherently
latent (unobservable) variables, which are often proxied by indicator variables. Many
researchers have used the multiple indicators multiple causes (MIMIC) model, which
can be estimated as linear structural relationships (LISREL). The researchers face
problems of measurement of health related issues, particularly health status of the
people among others. The Grossman model of demand for health, thus, has continued
to be refined, modified from both the theoretical and empirical prospective. Grossman
(2000) has provided a comprehensive review of this model in the theoretical and
empirical ground and suggested further research areas of interest. Grossman model is
more consistency with longitudinal data. In developing countries, data needed for the
estimation of this model are not usually available and as a result, Grossman’s models
are usually applied in the developed country context.