Education related inequity in health care with heterogeneous reporting of health

Reliance on self-rated health to proxy medical need can bias estimation of education-related inequity in healthcare utilization. We correct this bias both by instrumenting self-rated health with objective health indicators and by purging self-rated health of reporting heterogeneity that is identified from health vignettes. Using data on elderly Europeans, we find that instrumenting self-rated health shifts the distribution of visits to a doctor in the direction of inequality favouring the better educated. There is a further, and typically larger, shift in the same direction when correction is made for the tendency of the better educated to rate their health more negatively. © 2011 Royal Statistical Society.