nep-ias New Economics Papers
on Insurance Economics
Issue of 2005‒11‒12
five papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. Is there a Role for Private Health Insurance in Developing Countries? By Denis Drechsler; Johannes Jütting
  2. Taxation, Insurance and Precautionary Labor By Nick Netzer; Florian Scheuer
  3. Separating selection and incentive effects in health insurance. By Lucien Gardiol; Pierre-Yves Geoffard; Chantal Grandchamp
  5. Deposit Insurance and Depositor Discipline: Direct Evidence on Bank Switching Behavior in Japan By Noriko Inakura; Satoshi Shimizutani; Ralph Paprzycki

  1. By: Denis Drechsler; Johannes Jütting
  2. By: Nick Netzer; Florian Scheuer
  3. By: Lucien Gardiol; Pierre-Yves Geoffard; Chantal Grandchamp
    Abstract: This paper provides an analysis of the health insurance and health care consumption. A structural microeconomic model of joint demand for health insurance and health care is developed and estimated using full maximum likelihood method using Swiss insurance claims data for over 60 000 adult individuals. The estimation strategy relies on the institutional features of the Swiss system, in which each individual chooses among the same menu of contracts, ranked by the size of their deductible. The empirical analysis shows strong and robust evidence of selection effects. Nevertheless, once selection effects are controlled for, an important incentive effect ("ex-post moral hazard") remains. A decrease in the copayment rate from 100% to 10% increases the marginal demand for health care by about 90% and from 100% to 0% by about 150%. The correlation between insurance coverage and health care expenditures may be decomposed into the two effects: 75% may be attributed to selection, and 25 % to incentive effects.
    Date: 2005
  4. By: Pedro Pita Barros; Matilde P. Machado; Anna Sanz de Galdeano
    Abstract: In this paper we estimate the impact of health insurance coverage beyond National Health Insurance on the demand for several health services. Traditionally, the literature has tried to deal with the endogeneity of the private (extra) insurance decision by finding instrumental variables. It is hard to think, however, of any variable that a priori would be a good instrument and, therefore, we take a different approach. We concentrate on the most common health insurance plan in the Portuguese Health Survey, (ADSE), which is given to all civil servants and their dependants. We argue that this insurance is exogenous for most people i.e. not correlated with their health status. Under this identifying assumption we estimate the impact of having ADSE coverage on three different health services using a matching estimator technique. The measures of demand for health services are number of visits, number of blood and urine tests, and the probability of visiting a dentist. Preliminary results show large effects of ADSE for number of visits and tests among the young (18 to 30 years old) but only for tests are these effects statistically significantly different from zero. The magnitude of the effects represent 21.8 and 30 percent of the average number of visits and tests for the young. On the contrary we find no evidence of moral hazard on the probability of visiting a dentist. Finally, we argue that there is evidence of a positive cumulative effect of ADSE over the years.
    Date: 2005–10
  5. By: Noriko Inakura; Satoshi Shimizutani; Ralph Paprzycki
    Abstract: As Japan's financial system moves toward a more market oriented one, depositor discipline is expected to play a larger role in the monitoring of the country's banks. Relying on detailed survey data on households' bank switching behavior matched with banks' financial data, we examine households' response to bank risk and different deposit insurance schemes. We find that bank switching in response to risk was more frequent in 2001 than in 1996 and that households' choice of bank provides an adequate reflection of banks' financial health. We also examine the determinants of households' knowledge of the deposit insurance scheme and find that income, the amount of households' financial assets, and educational attainment are all significant factors. What is more, households' extent of knowledge regarding the deposit insurance scheme was an important determinant of bank switching behavior. The results suggest that depositor discipline appears to work and could play an important supplementary role in monitoring the banking sector.
    Keywords: depositor discipline, deposit insurance, pay-off, dopositor-level data
    JEL: G21 G32
    Date: 2005–10

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