nep-ias New Economics Papers
on Insurance Economics
Issue of 2011‒09‒22
six papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. Opt Out or Top Up? Voluntary Healthcare Insurance and the Public vs. Private Substitution By Fabbri, Daniele; Monfardini, Chiara
  2. Did the US Infertility Health Insurance Mandates Affect the Timing of First Birth? By Ohinata, A.
  3. Assessing Redistribution in the Uruguayan Social Security System By Alvaro Forteza; Irene Mussio
  4. Assessing Redistribution within Social Insurance Systems.The cases of Argentina, Brazil, Chile, Mexico and Uruguay By Alvaro Forteza
  5. Customer driven marketing strategy of LIC international in Bahrain: a product specific study By Pillai, Rajasekharan; Rao, M S; Thampy, Jaik; Peter, Jerrin
  6. Optimal auditing and insurance in a dynamic model of tax compliance By B. Ravikumar; Yuzhe Zhang

  1. By: Fabbri, Daniele (University of Bologna); Monfardini, Chiara (University of Bologna)
    Abstract: We investigate whether people enrolled into voluntary health insurance (VHI) substitute public consumption with private (opt out) or just enlarge their private consumption, without reducing reliance upon public provisions (top up). We study the case of Italy, where a mixed insurance system is in place. To this purpose, we specify a joint model for public and private specialist visits counts, and allow for different degrees of endogenous supplementary insurance coverage, looking at the insurance coverage as driven by a trinomial choice process. We disentangle the effect of income and wealth by going through two channels: the direct impact on the demand for healthcare and that due to selection into VHI. We find evidence of opting out: richer and wealthier individuals consume more private services and concomitantly reduce those services publicly provided through selection into for-profit VHI. These results imply that the market for VHI eases the redistribution from high income (doubly insured) individuals to low income (not doubly insured) ones operated by the Italian National Health Service (NHS). Accounting for VHI endogeneity in the joint model of the two counts is crucial to this conclusion.
    Keywords: public provision of private goods, health insurance, bivariate count data model, endogenous multinomial treatment, simultaneous equation modeling
    JEL: C34 C35 D12 H44 I11
    Date: 2011–09
  2. By: Ohinata, A. (Tilburg University, Center for Economic Research)
    Abstract: From 1977-2001, 15 US states mandated health insurance providers to offer coverage for infertility treatment. Although the majority of the past literature has studied impacts on older women who are likely to seek treatment, this paper proposes that the mandates may have had a wider impact on the US population. Specifically, it may have given an option for younger women to delay birth since these policies reduced the opportunity cost of having a child in the future. Results suggest a significant delay of 1-2 years in the time of first birth among highly educated white women.
    Keywords: Infertility;Insurance mandates;Fertility;Timing of birth.
    JEL: I18 J13 J18
    Date: 2011
  3. By: Alvaro Forteza (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Irene Mussio (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: We assess redistribution in the Uruguayan main pension and unemployment insurance programs on a lifetime basis. Using administrative records from social security, we simulate lifetime declared labor income and flows of contributions and benefits of affiliates to the programs. Expected present values of income and net flows are also computed. Equipped with these estimations we construct standard measures of distribution and redistribution of lifetime labor income through the social security system. Our findings suggest that these programs reduce income inequality. In particular, social Security reduces the Gini coefficient of expected lifetime formal labor income by almost 2 percentage points.
    Keywords: Redistribution; Social Security; Uruguay
    JEL: H55 J14 J2
    Date: 2011–08
  4. By: Alvaro Forteza (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: This paper summarizes the main findings in a series of coordinated studies conducted to assess the impact of social security programs on the distribution of lifetime labor income in Argentina, Brazil, Chile, Mexico and Uruguay. The country-case studies find varying degrees of redistribution, with PAYG-DB and mixed programs redistributing more than individual savings accounts programs. Notwithstanding, it is the Chilean individual savings accounts program, combined with the recently reformed solidarity pillar, the one that contributes more to reducing inequality in this group of countries.
    Keywords: Redistribution, Social Security
    JEL: H55 J14 J2
    Date: 2011–08
  5. By: Pillai, Rajasekharan; Rao, M S; Thampy, Jaik; Peter, Jerrin
    Abstract: Abstract Marketing of service product requires a slightly different strategy owing to the idiosyncratic nature of service items. The present study explores the customer oriented marketing strategy of LIC International in the Kingdom of Bahrain. The approach of the study was exploratory and personal interview was conducted to contribute major input source to the research. The company has been following a different marketing strategy in the study area different from the conventional approach in the home country. The customer focused marketing strategy was reviewed in seven Ps frame work.
    Keywords: Service marketing; LIC international; insurance marketing; Seven Ps
    JEL: M31 G22
    Date: 2011
  6. By: B. Ravikumar; Yuzhe Zhang
    Abstract: We study the optimal auditing of a taxpayer’s income in a dynamic principal- agent model of hidden income. Taxpayers in our model initially have low income and stochastically transit to high income that is an absorbing state. A low-income taxpayer who transits to high income can underreport his true income and evade his taxes. With a constant absolute risk-aversion utility function and a costly and imperfect auditing technology, we show that the optimal auditing mechanism in our model consists of cycles. Within each cycle, a low-income taxpayer is initially unaudited, but if the duration of low-income reports exceeds a threshold, then the auditing probability becomes positive. That is, the tax authority guarantees that the taxpayer will not be audited until the threshold duration is reached. We also find that auditing becomes less frequent if the auditing cost is higher or if the variance of income is lower.
    Keywords: Tax auditing ; Taxation
    Date: 2011

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