nep-hea New Economics Papers
on Health Economics
Issue of 2014‒03‒22
27 papers chosen by
Yong Yin
SUNY at Buffalo

  1. RESIDENTIAL MOBILITY ACROSS LOCAL AREAS IN THE UNITED STATES AND THE GEOGRAPHIC DISTRIBUTION OF THE HEALTHY POPULATION By Arline T. Geronimus; John Bound; Annie Ro
  2. Do Longevity Expectations Influence Retirement Plans? By Mashfiqur R. Khan; Matthew S. Rutledge; April Yanyuan Wu
  3. Reference-Dependent Effects of Unemployment on Mental Well-Being By Martina Grunow
  4. Medical revolutions? The growth of medicine in England, 1660-1800 By Teerapa Pirohakul; Patrick Wallis
  5. Health responses to a wealth shock: Evidence from a Swedish tax reform By Erixson, Oscar
  6. How Much Does Social Status Matter to Health? Evidence from China's Academician Election By Liu, Gordon G.; Kwon, Ohyun; Xue, Xindong; Fleisher, Belton M.
  7. Do Occupational Demands Explain the Educational Gradient in Health? By Meyer, Sophie-Charlotte; Künn-Nelen, Annemarie
  8. Education, Health and Wages By Heckman, James J.; Humphries, John Eric; Veramendi, Gregory; Urzua, Sergio
  9. Maternal Employment and Childhood Obesity in China: Evidence from the China Health and Nutrition Survey By Nie, Peng; Sousa-Poza, Alfonso
  10. Newborn Health and the Business Cycle: Is It Good to Be Born in Bad Times? By Aparicio Fenoll, Ainhoa; Gonzalez, Libertad
  11. Optimizing Health for Complex Adults in Primary Care: Current Challenges and a Way Forward. By Hollis Day; Elizabeth Eckstrom; Sei Lee; Heidi Wald; Steven Counsell; Eugene Rich
  12. Advancing Geriatrics Research, Education, and Practice: Policy Challenges After the Great Recession. By Judy T. Zerzan; Eugene C. Rich
  13. Financial Considerations: Rate Setting for Medicaid Managed Long Term Services and Supports (MLTSS) in Integrated Care Programs. By Jenna Libersky; James Verdier
  14. Implementing Coordinated Care for Dual Eligibles: Conflicts and Opportunities. By James M. Verdier
  15. Inpatient Hospital Prices Drive Spending Variation for Episodes of Care for Privately Insured Patients. By Chapin White; James D. Reschovsky; Amelia M. Bond
  16. How are CHIPRA Quality Demonstration States Working Together to Improve the Quality of Health Care for Children? By Dana Petersen; Henry Ireys; Grace Ferry; Leslie Foster
  17. How are CHIPRA Quality Demonstration States Designing and Implementing Caregiver Peer Support Programs? By Grace A. Ferry; Henry Ireys; Dana Petersen; Joseph Zickafoose
  18. Programs to Reduce Teen Pregnancy, Sexually Transmitted Infections, and Associated Sexual Risk Behaviors: A Systematic Review. By Brian Goesling; Silvie Colman; Christopher Trenholm; Mary Terzian; Kristin Moore
  19. Does Location Determine Medical Practice Patterns? By James Reschovsky
  20. Global Pharmaceutical Management: Building a Fair Pricing Policy By Rutger Daems; Edith Maes
  21. Health care and social care: complements, substitutes and attributes By Wildman, John; McMeekin, Peter
  22. Google Flu Trends Still Appears Sick:�An Evaluation of the 2013â€2014 Flu Season By Lazer, David; Ryan Kennedy; Gary King; Alessandro Vespignani
  23. Professional norms and physician behavior: homo oeconomicus or homo hippocraticus? By Kesternich, Iris; Schumacher, Heiner; Winter, Joachim
  24. A formal investigation of inequalities in health behaviours after the age 50 on the island of Ireland By Eibhlin Hudson; David Madden; Irene Mosca
  25. Life insurance demand under health shock risk By Kraft, Holger; Schendel, Lorenz S.; Steffensen, Mogens
  26. Consumption-investment problems with stochastic mortality risk By Schendel, Lorenz S.
  27. Critical illness insurance in life cycle portfolio problems By Schendel, Lorenz S.

  1. By: Arline T. Geronimus; John Bound; Annie Ro
    Abstract: Determining whether population dynamics provide competing explanations to place effects for observed geographic patterns of population health is critical for understanding health inequality. We focus on the working-age population where health disparities are greatest and analyze detailed data on residential mobility collected for the first time in the 2000 US census. Residential mobility over a 5-year period is frequent and selective, with some variation by race and gender. Even so, we find little evidence that mobility biases cross-sectional snapshots of local population health. Areas undergoing large or rapid population growth or decline may be exceptions. Overall, place of residence is an important health indicator; yet, the frequency of residential mobility raises questions of interpretation from etiological or policy perspectives, complicating simple understandings that residential exposures alone explain the association between place and health. Psychosocial stressors related to contingencies of social identity associated with being black, urban, or poor in the U.S. may also have adverse health impacts that track with structural location even with movement across residential areas.
    Keywords: place and health, residential mobility, race and health, SES, urban, rural
    Date: 2014–02
    URL: http://d.repec.org/n?u=RePEc:cen:wpaper:14-14&r=hea
  2. By: Mashfiqur R. Khan; Matthew S. Rutledge; April Yanyuan Wu
    Abstract: The brief’s key findings are: Workers who think they have excellent chances of living to ages 75 and 85 plan to work longer than those who think their chances are poor. These perceptions of life expectancy also influence workers’ actual retirement behavior, though to a lesser degree. These results are consistent with the notion that while workers who expect to live longer plan to retire later, actual behavior is influenced by unexpected shocks.
    Date: 2014–03
    URL: http://d.repec.org/n?u=RePEc:crr:issbrf:ib2014-6&r=hea
  3. By: Martina Grunow
    Abstract: This paper provides an empirical analysis of reference-dependent effects of unemployment on mental well-being. We show that the negative effect of unemployment on mental well-being depends on expectations about the future employment status. Several contributions to the literature have shown that the perception of the individual employment status depends on the surrounding unemployment rate. We argue that expectations are a possible link between unemployment rates and the individual employment status regarding changes in mental well-being. Theoretical foundation comes from models for reference-dependent preferences with endogenous reference points. We provide a simple theoretical model to motivate and structure the empirical analysis. Using data from the German Socio-Economic Panel, we estimate a pairwise interacted model for employment status and expectations over two time periods. Life satisfaction is used as a proxy for mental well-being. To identify a causal effect of unemployment, expectations and their interactions on mental wellbeing, the analysis relies on fixed effects and exogenous entries into unemployment due to plant closures. We confirm the standard result that unemployment has a negative effect on mental well-being. Furthermore, the results deliver empirical evidence for reference-dependent effects of unemployment on mental well-being. We find that becoming unemployed unexpectedly is more severe as if the unemployment was expected. Therefore, this paper contributes to the understanding of how mental well-being is affected by unemployment and delivers empirical support for the theoretical models of reference-dependent preference wit endogenous reference points determined by expectations.
    Keywords: Subjective Well-Being, Unemployment, Reference-Dependence, Reference Points
    JEL: C23 D03 D84 I10 I18 J01 J60
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp638&r=hea
  4. By: Teerapa Pirohakul; Patrick Wallis
    Abstract: This paper studies demand for commercial medical assistance in early modern England. We measure individual consumption of medical and nursing services using a new dataset of debts at death between c.1670-c.1790. Levels of consumption of medical services were high and stable in London from the 1680s. However, we find rapid growth in the provinces, in both the likelihood of using medical assistance, and the sums spent on it. The structure of medical services also shifted, with an increase in ‘general practice’, particularly by apothecaries. The expansion in medical services diffused from London, and was motivated by changing preferences, not wealth
    Keywords: health; service sector; health care; Britain; seventeenth century; eighteenth century
    JEL: O52 I3
    Date: 2014–01
    URL: http://d.repec.org/n?u=RePEc:ehl:wpaper:56053&r=hea
  5. By: Erixson, Oscar (Uppsala Center for Fiscal Studies)
    Abstract: This essay contributes in two ways to the literature on the effects of economic circumstances on health. First, it deals with reverse causality and omitted variable bias by exploiting exogenous variation in inherited wealth generated by the unexpected repeal of the Swedish inheritance tax. Second, it analyzes responses in health outcomes from administrative registers. The results show that increased wealth has limited impacts on objective adult health over a period of six years. This is in line with what has been documented previously regarding subjective health outcomes. If anything, it appears as if the wealth shock resulting from the tax reform leads people to seek care for symptoms of disease, which result in that cancer is detected and possibly treated earlier. One possible explanation for this preventive response is that good health is needed for enjoying the improved consumption prospects generated by the wealth shock.
    Keywords: inheritances; tax reform; wealth shock; objective health
    JEL: D10 H30 I10 I12 I14
    Date: 2014–02–28
    URL: http://d.repec.org/n?u=RePEc:hhs:uufswp:2014_003&r=hea
  6. By: Liu, Gordon G. (Peking University); Kwon, Ohyun (University of Wisconsin-Madison); Xue, Xindong (Zhongnan University of Economics and Law); Fleisher, Belton M. (Ohio State University)
    Abstract: The impact of socio-economic status on health has been widely recognized, but the independent impact of social status alone on health remains inconclusive. We approach this challenge by exploiting a natural experiment in which subjects undergo a shift in their social status without considerable economic impact. We gather data on 4190 scientists who were either nominated for or successfully elected to the Chinese Academy of Science or of Engineering. Being elected as an academician in China is a boost in social status (vice-ministerial level) with negligible economic impact (US$30 monthly before 2009). After correcting for two sources of bias: 1) Some potential academicians decease too young to be elected, leading to immortal-time bias in favor of academicians and 2) the endogenous relationship between health and social status, we find that the enhanced social status of becoming an academician leads to approximately 1.2-years longer life.
    Keywords: social status, health, academician, China
    JEL: I12
    Date: 2014–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8010&r=hea
  7. By: Meyer, Sophie-Charlotte (University of Wuppertal); Künn-Nelen, Annemarie (ROA, Maastricht University)
    Abstract: The aim of this paper is to investigate to what extent occupation-specific demands explain the relationship between education and health. We concentrate on ergonomic, environmental, psychical, social and time demands. Merging the German Microcensus 2009 data with a dataset including detailed occupational demands (German Employment Survey 2006), we have a unique dataset to analyze the mediating role of occupational demands in the relationship between education and health status on the one hand and education and health behavior (BMI and smoking) on the other. We base our analyses on the entire working population and therefore also include those who no longer work, taking occupational demands related to their last job. First, we find that occupational demands are significantly related to subjective health and health behaviors. This holds even stronger for those who are no longer employed. Second, we find that whereas occupational demands do not explain educational differences in subjective health status, they do partially mediate the education gradient in the considered health behaviors. Educational differences in smoking status can partly be explained by ergonomic, environmental, psychical and social demands. The educational gradient in BMI is partly attributable to social occupational demands.
    Keywords: education, occupational demands, working conditions, occupations, health, health behavior
    JEL: I1 J2 I2
    Date: 2014–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8011&r=hea
  8. By: Heckman, James J. (University of Chicago); Humphries, John Eric (University of Chicago); Veramendi, Gregory (Arizona State University); Urzua, Sergio (University of Maryland)
    Abstract: This paper develops and estimates a model with multiple schooling choices that identifies the causal effect of different levels of schooling on health, health-related behaviors, and labor market outcomes. We develop an approach that is a halfway house between a reduced form treatment effect model and a fully formulated dynamic discrete choice model. It is computationally tractable and identifies the causal effects of educational choices at different margins. We estimate distributions of responses to education and find evidence for substantial heterogeneity in unobserved variables on which agents make choices. The estimated treatment effects of education are decomposed into the direct benefits of attaining a given level of schooling and indirect benefits from the option to continue on to further schooling. Continuation values are an important component of our estimated treatment effects. While the estimated causal effects of education are substantial for most outcomes, we also estimate a quantitatively important effect of unobservables on outcomes. Both cognitive and socioemotional factors contribute to shaping educational choices and labor market and health outcomes. We improve on LATE by identifying the groups affected by variations in the instruments. We find benefits of cognition on most outcomes apart from its effect on schooling attainment. The benefits of socioemotional skills on outcomes beyond their effects on schooling attainment are less precisely estimated.
    Keywords: education, early endowments, factor models, health, treatment effects
    JEL: C32 C38 I12 I14 I21
    Date: 2014–03
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8027&r=hea
  9. By: Nie, Peng (University of Hohenheim); Sousa-Poza, Alfonso (University of Hohenheim)
    Abstract: Using five waves from the China Health and Nutrition Survey (CHNS), we investigate the association between maternal employment and obesity in children aged 3–17 in both rural and urban China. Using BMI and waist circumference as measures for pediatric adiposity, we provide scant evidence for its relation to maternal employment. We also find no strong association between maternal employment and our measures for children's diet and physical activity. Our study also suggests that grandparenting could have beneficial effects on childhood obesity.
    Keywords: childhood obesity, maternal employment, China
    JEL: I12 J13 J22
    Date: 2014–03
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8030&r=hea
  10. By: Aparicio Fenoll, Ainhoa (Collegio Carlo Alberto); Gonzalez, Libertad (Universitat Pompeu Fabra)
    Abstract: We study the effect of the cycle on the health of newborn babies using 30 years of birth-certificate data for Spain. We find that babies are born healthier when the local unemployment rate is high. Although fertility is lower during recessions, the effect on health is not the result of selection, since the main result survives the inclusion of parents' fixed-effects. Analysis of National Health Survey data shows that fertility-age women engage in healthier behaviors during recessions (in terms of exercise, sleep, smoking and drinking) and report better overall health. We conclude that maternal health is a plausible mediating channel.
    Keywords: newborn health, business cycle, Spain
    JEL: E32 I10 J13
    Date: 2014–03
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8031&r=hea
  11. By: Hollis Day; Elizabeth Eckstrom; Sei Lee; Heidi Wald; Steven Counsell; Eugene Rich
    Keywords: implementation research, geriatrics, primary care
    JEL: I
    Date: 2014–03–01
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:8044&r=hea
  12. By: Judy T. Zerzan; Eugene C. Rich
    Keywords: geriatrics, health policy, medical education, health care delivery
    JEL: I
    Date: 2014–03–01
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:8045&r=hea
  13. By: Jenna Libersky; James Verdier
    Keywords: Dual Eligibles, Medicaid Managed Care, Long Term Services, Rate Setting
    JEL: I
    Date: 2014–02–25
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:8046&r=hea
  14. By: James M. Verdier
    Keywords: Dual Eligibles, Coordinated Care, Health
    JEL: I
    Date: 2014–02–25
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:8047&r=hea
  15. By: Chapin White; James D. Reschovsky; Amelia M. Bond
    Keywords: Inpatient Hospital Prices, Spending Variation, Privately Insured Patients, NIHCR
    JEL: I
    Date: 2014–02–28
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:8048&r=hea
  16. By: Dana Petersen; Henry Ireys; Grace Ferry; Leslie Foster
    Abstract: This evaluation highlight illustrates how six grantees use multistate partnerships to improve the quality of children's health care. It describes the strategies that states use to create and maintain cross-state relationships, as well as the benefits and challenges of partnering.
    Keywords: CHIPRA, Quality of Health Care, Children's Health, Quality Demonstration
    JEL: I
    Date: 2014–01–30
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:8051&r=hea
  17. By: Grace A. Ferry; Henry Ireys; Dana Petersen; Joseph Zickafoose
    Abstract: This brief focuses on efforts in four states—Georgia, Idaho, Maryland, and Utah—to expand access to peer support for caregivers of children with special health care needs.
    Keywords: CHIPRA, Quality Demonstration, Caregiver Peer Support, Health
    JEL: I
    Date: 2014–02–28
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:8052&r=hea
  18. By: Brian Goesling; Silvie Colman; Christopher Trenholm; Mary Terzian; Kristin Moore
    Keywords: Evidence-Based Programs, HIV, Sexually Transmitted Infections, Systematic Review, Teen Pregnancy
    JEL: I
    Date: 2014–02–11
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:8056&r=hea
  19. By: James Reschovsky
    Keywords: Medical Practice Patterns, Health Care Spending, Medicare
    JEL: I
    Date: 2014–02–28
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:8057&r=hea
  20. By: Rutger Daems (Planet Strategy Group); Edith Maes (Maastricht School of Management, Endepolsdomein 150, 6229 EP Maastricht, The Netherlands; maes@msm.nl)
    Abstract: Improving access to healthcare globally represents a pressing societal challenge requiring a comprehensive approach. Stakeholders will need to work together in their quest to finding sustainable solutions that promote universal access to care. In addition, there is a need to better define the distinctive roles of the different stakeholders in the area of global access to pharmaceuticals. While the main task of innovation-driven pharmaceutical companies is to develop high quality, innovative medicines that address unmet needs, they can through their pricing policies influence the affordability of these medicines. Given this responsibility and the impact this will have on society and public health, companies have to be conscious about designing affordable pricing strategies. Since pricing is an important factor in the mix of activities to enhance access, the role of industry in the wider public domain is to be a trustworthy partner. Yet, industry cannot be held solely responsible for securing ‘health for all’ which is considered the prerogative of government. To maximize industry’s contribution, we recommend using a differentiated, equitable pricing policy aimed at enhancing access. We developed a number of pricing scenarios to establish an optimal balance that would allow stimulating both innovation and access.
    Keywords: globalization, pharmaceuticals, access to medicine, pricing, equity.
    Date: 2014–03
    URL: http://d.repec.org/n?u=RePEc:msm:wpaper:2014/05&r=hea
  21. By: Wildman, John; McMeekin, Peter
    Abstract: Ageing populations are a major challenge for most developed countries, where social security systems were developed in the post war period. It has been suggested that the costs of caring for the ageing population places a considerable strain on individuals, as well as on the public purse, and many countries are looking for ways to reduce costs. One of the major issues is the relationship between health care and social care. This paper considers health care and social care as complements and substitutes through a household production framework. We demonstrate how health care and social care are attributes that are valued by individuals and how in the presence of a perfect market individuals would choose combinations of these attributes. We highlight how, even with technical efficiency, sub-optimal combinations of health and social care may be chosen. We also show, through the introduction of a new good, how there may be opportunities to alleviate the costs of the ageing population.
    Keywords: Ageing population, health production, attributes, complements and substitutes, market failure
    JEL: I1 I11 I12 J14
    Date: 2014–03–18
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:54425&r=hea
  22. By: Lazer, David; Ryan Kennedy; Gary King; Alessandro Vespignani
    Abstract: Last year was difficult for Google Flu Trends (GFT). In early 2013, Nature reported that GFT was estimating more than double the percentage of doctor visits for influenza like illness than the Centers for Disease Control and Prevention s (CDC) sentinel reports during the 2012 2013 flu season (1). Given that GFT was designed to forecast upcoming CDC reports, this was a problematic finding. In March 2014, our report in Science found that the overestimation problem in GFT was also present in the 2011 2012 flu season (2). The report also found strong evidence of autocorrelation and seasonality in the GFT errors, and presented evidence that the issues were likely, at least in part, due to modifications made by Google s search algorithm and the decision by GFT engineers not to use previous CDC reports or seasonality estimates in their models what the article labeled algorithm dynamics and big data hubris respectively. Moreover, the report and the supporting online materials detailed how difficult/impossible it is to replicate the GFT results, undermining independent efforts to explore the source of GFT errors and formulate improvements.
    Date: 2014–01
    URL: http://d.repec.org/n?u=RePEc:qsh:wpaper:155056&r=hea
  23. By: Kesternich, Iris; Schumacher, Heiner; Winter, Joachim
    Abstract: Physicians' treatment decisions determine the level of health care spending to a large extent. The analysis of physician agency describes how doctors trade off their own and their patients' benefits, with a third party (such as the collective of insured individuals or the taxpayers) bearing the costs. Professional norms are viewed as restraining physicians' self-interest and as introducing altruism towards the patient. We present a controlled experiment that analyzes the impact of professional norms on prospective physicians' trade-offs between her own profits, the patients' benefits, and the payers' expenses for medical care. We find that professional norms derived from the Hippocratic tradition shift weight to the patient in the physician's decisions while decreasing his self-interest and efficiency concerns.
    Keywords: social preferences; allocation of medical resources; professional norms
    JEL: A13 I19 C72 C91
    Date: 2014–03–13
    URL: http://d.repec.org/n?u=RePEc:trf:wpaper:456&r=hea
  24. By: Eibhlin Hudson (The Irish Longitudinal Study on Ageing, Trinity College Dublin); David Madden (University College Dublin); Irene Mosca (The Irish Longitudinal Study on Ageing, Trinity College Dublin)
    Abstract: Smoking, low physical activity and frequent alcohol consumption may have substantial health risks in terms of disease, quality of life and mortality. Understanding inequality in relation to these behaviours among older people is important in the context of a rapidly ageing population. In this study, we examine income-related inequality in relation to these three key health behaviours using data on older adults from both the Republic of Ireland and Northern Ireland. We employ concentration indices and decompose them to determine the factors which contribute most to inequality. We then examine whether differences exist between the two regions. We find that smoking and low physical activity are more concentrated among those with lower incomes in both regions. In relation to physical activity, the magnitude of the inequality is higher for Northern Ireland. Frequent alcohol consumption is more concentrated among those with higher incomes in both regions. Self-assessed health and age tend to feature prominently for all behaviours in terms of contribution to inequality. Marital status and labour market status tend to play a less pronounced role. In terms of Northern Ireland/Republic of Ireland comparisons with respect to the decompositions, probably the biggest difference is to be observed in the greater role accorded to labour market status in the Republic. For the other factors, the orders of magnitude are reasonably similar. This suggests that in many cases it may be the same underlying factors which lie behind income related inequalities.
    Keywords: inequality; health behaviours; older adults; Republic of Ireland; Northern Ireland
    JEL: I14 J14
    Date: 2014–03–13
    URL: http://d.repec.org/n?u=RePEc:ucd:wpaper:201406&r=hea
  25. By: Kraft, Holger; Schendel, Lorenz S.; Steffensen, Mogens
    Abstract: This paper studies the life cycle consumption-investment-insurance problem of a family. The wage earner faces the risk of a health shock that significantly increases his probability of dying. The family can buy term life insurance with realistic features. In particular, the available contracts are long term so that decisions are sticky and can only be revised at significant costs. Furthermore, a revision is only possible as long as the insured person is healthy. A second important and realistic feature of our model is that the labor income of the wage earner is unspanned. We document that the combination of unspanned labor income and the stickiness of insurance decisions reduces the insurance demand significantly. This is because an income shock induces the need to reduce the insurance coverage, since premia become less affordable. Since such a reduction is costly and families anticipate these potential costs, they buy less protection at all ages. In particular, young families stay away from life insurance markets altogether. --
    Keywords: Health shocks,Portfolio choice,Term life insurance,Mortality risk,Labor income risk
    JEL: D14 D91 G11 G22
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:safewp:40&r=hea
  26. By: Schendel, Lorenz S.
    Abstract: I numerically solve realistically calibrated life cycle consumption-investment problems in continuous time featuring stochastic mortality risk driven by jumps, unspanned labor income as well as short-sale and liquidity constraints and a simple insurance. I compare models with deterministic and stochastic hazard rate of death to a model without mortality risk. Mortality risk has only minor effects on the optimal controls early in the life cycle but it becomes crucial in later years. A diffusive component in the hazard rate of death has no significant impact, whereas a jump component is desired by the agent and influences optimal controls and wealth evolution. The insurance is used to ensure optimal bequest such that there is no accidental bequest. In the absence of the insurance, the biggest part of bequest is accidental. --
    Keywords: Stochastic mortality risk,Health jumps,Labor income risk,Portfolio choice,Insurance
    JEL: D91 G11
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:safewp:43&r=hea
  27. By: Schendel, Lorenz S.
    Abstract: I analyze a critical illness insurance in a consumption-investment model over the life cycle. I solve a model with stochastic mortality risk and health shock risk numerically. These shocks are interpreted as critical illness and can negatively affect the expected remaining lifetime, the health expenses, and the income. In order to hedge the health expense effect of a shock, the agent has the possibility to contract a critical illness insurance. My results highlight that the critical illness insurance is strongly desired by the agents. With an insurance profit of 20%, nearly all agents contract the insurance in the working stage of the life cycle and more than 50% of the agents contract the insurance during retirement. With an insurance profit of 200%, still nearly all working agents contract the insurance, whereas there is little demand in the retirement stage. --
    Keywords: Health shocks,Health expenses,Labor income risk,Stochastic mortality risk,Portfolio choice
    JEL: D91 G11 I13
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:safewp:44&r=hea

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