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on Insurance Economics |
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Issue of 2014‒11‒01
fifteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | International Monetary Fund. Monetary and Capital Markets Department |
| Keywords: | Financial Sector Assessment Program;Insurance regulations;Insurance supervision;Reports on the Observance of Standards and Codes;Switzerland; |
| Date: | 2014–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/265&r=ias |
| By: | World Bank Group |
| Keywords: | Insurance and Risk Mitigation Macroeconomics and Economic Growth - Climate Change Economics Finance and Financial Sector Development - Debt Markets Urban Development - Hazard Risk Management Law and Development - Insurance Law |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:18940&r=ias |
| By: | Langpap, Christian; Wu, JunJie |
| Abstract: | This paper integrates economic and physical models to assess how federal crop revenue insurance programs might affect land use, cropping systems, and environmental quality in the U.S. Corn Belt region. The empirical framework includes econometric models that predict land conversion, crop choices, and crop rotations at the parcel level based on expectation and variance of crop revenues, land quality, climate conditions, and physical characteristics at each site. The predictions are then combined with site-specific environmental production functions to determine the effect of revenue insurance on nitrate runoff and leaching, soil water and wind erosion, and carbon sequestration. Results suggest that crop insurance will have small impacts on conversions of non-cropland to cropland, but more significant impacts on crop choice. These changes in crop mix have moderate impacts on agricultural pollution. |
| Keywords: | Crop Insurance, Revenue Insurance, Crop Choice, Environmental Quality, Agricultural and Food Policy, Land Economics/Use, Risk and Uncertainty, Q18, Q28, |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaeacj:186643&r=ias |
| By: | Biais, Bruno; Heider, Florian; Hoerova, Marie |
| Abstract: | Derivatives activity, motivated by risk-sharing, can breed risk taking. Bad news about the risk of the asset underlying the derivative increases the expected liability of a protection seller and undermines her risk prevention incentives. This limits risk-sharing, and may create endogenous counterparty risk and contagion from news about the hedged risk to the balance sheet of protection sellers. Margin calls after bad news can improve protection sellers incentives and enhance the ability to share risk. Central clearing can provide insurance against counterparty risk but must be designed to preserve risk-prevention incentives. |
| Keywords: | Hedging; Insurance; Derivatives; Moral hazard; Risk management;Counterparty risk; Contagion; Central clearing; Margin requirements |
| JEL: | D82 G21 G22 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:28439&r=ias |
| By: | Steffen Huck (Wissenschaftszentrum Berlin für Sozialforschung (WZB)); Gabriele Lünser (University College London - Centre for Economic Learning and Social Evolution (ELSE)); Florian Spitzer (Department of Economics, Vienna Center for Experimental Economics (VCEE), University of Vienna); Jean-Robert Tyran (Department of Economics, Copenhagen University) |
| Abstract: | In a laboratory experiment designed to capture key aspects of the interaction between physicians and patients in a stylized way, we study the effects of medical insurance and competition in the guise of free choice of physician. Medical treatment is an example of a credence good: only the physician (but not the patient) knows the appropriate treatment, and even after consulting, the patient is not sure whether he got proper treatment or got an unnecessary treatment, i.e. was overtreated. We find that with insurance, moral hazard looms on both sides of the market: patients consult more often and physicians overtreat more often than in the baseline condition. Competition decreases overtreatment compared to the baseline and patients therefore consult more often. When the two institutions are combined, competition is found to partially offset the adverse effects of insurance: most patients seek treatment, but overtreatment is moderated. |
| Keywords: | Credence good, Patient, Physician, Overtreatment, Competition, Insurance, Moral hazard |
| JEL: | C91 I11 I13 |
| Date: | 2014–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1419&r=ias |
| By: | Michael R. CARTER (University of Wisconsin); Alain de JANVRY (FERDI); Elisabeth SADOULET (University of California - Berkeley); Alexandros SARRIS (University of Athens) |
| Abstract: | Index-based weather insurance is a major institutional innovation that could revolutionize access to formal insurance for millions of smallholder farmers and related individuals. It has been introduced in pilot or experimental form in many countries at the individual or institutional level. Significant efforts have been made in research to assess its impacts on shock coping and risk management, and to contribute to improvements in design and implementation. While impacts have typically been positive where uptake has occurred, uptake has generally been low and in most cases under conditions that were not sustainable. This paper addresses the reasons for this current discrepancy between promise and reality. We conclude on perspectives for improvements in product design, complementary interventions to boost uptake, and strategies for sustainable scaling up of uptake. Specific recommendations include: (1) The first-order importance of reducing basis risk, pursuing for this multiple technological, contractual, and institutional innovations. (2) The need to use risk layering, combining the use of insurance, credit, savings, and risk-reducing investments to optimally address different categories of risk. For this, these various financial products should be offered in a coordinated fashion. (3) Calling on a role for state intervention on two fronts. One is the implementation of public certification standards for maximum basis risk of insurance contracts; the other is “smart” subsidies for learning, data accumulation, initial re-insurance, and catastrophic risks. (4) Using twin-track institutional-level index insurance contracts combined with intra-institution distribution of payouts to reduce basis risk and improve the quality of insurance. For this, credible intra-institutional rules for idiosyncratic transfers must be carefully designed. Finally (5), the need for further research on the determinants of behavior toward risk and insurance, the design of index-based insurance products combined with others risk handling financial instruments, and rigorous impact analyses of on-going programs and experiments. |
| JEL: | O16 Q12 Q14 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:1800&r=ias |
| By: | Takahashi, Kazushi; Ikegami, Munenobu; Sheahan, Megan; Barrett, Christopher B. |
| Abstract: | Microinsurance is widely considered an important tool for sustainable poverty reduction, especially in the face of increasing climate risk. Although index-based microinsurance, which should be free from the classical incentive problems, has attracted considerable attention, uptake rates have generally been weak in low-income rural communities. We explore the purchase patterns of index-based livestock insurance in southern Ethiopia, focusing in particular on the role of accurate product comprehension and price, including the prospective impact of temporary discount coupons on subsequent period demand due to price anchoring effects. We find that randomly distributed learning kits contribute to improving subjects' knowledge of the products; however, we do not find strong evidence that the improved knowledge per se induces greater uptake. We also find that reduced price due to randomly distributed discount coupons has an immediate, positive impact on uptake, without dampening subsequent period demand due to reference-dependence associated with price anchoring effects. |
| Keywords: | Ethiopia, Insurance, Livestock, Rural economy, Poverty, Climate, Index-Based Livestock Insurance, Quasi-Experiment, Uptake |
| JEL: | D12 G22 O12 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper480&r=ias |
| By: | Kifmann, Mathias; Roeder, Kerstin |
| Abstract: | This paper studies how society votes on the payroll taxes of a basic income and a social health insurance scheme. Individuals differ along the two most important dimensions when it comes to the design of the two welfare schemes, namely, income and risk. Even though the introduction of a basic income scheme opens up the possibility for additional redistribution, it also crowds out social health insurance. We show that when both welfare schemes are open for debate, the political equilibrium is such that only the basic income scheme prevails. At the constitutional stage we determine which welfare scheme society agrees to implement behind the veil of ignorance and with a Rawlsian objective. Since social health insurance not only redistributes income from rich to poor but also from low-risk to high-risk agents, the doubly disadvantaged in society – low-income and high-risk agents – may lose out in the political process when a basic income scheme is in place. Depending on the amount of health care expenditure and the inequalities in income and risk, it may well be that a society will find it optimal to set up an institutional framework for a social health insurance scheme only. |
| Keywords: | Basic Income; Social Health Insurance; Income Taxation; Political Support |
| JEL: | D6 D7 H1 H2 H5 |
| Date: | 2014–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:21601&r=ias |
| By: | Mebratie, A.D.; Sparrow, R.A.; Debebe, Z.Y.; Alemu, G.; Bedi, A.S. |
| Abstract: | Low contract renewal rates have been identified as one of the challenges facing the development of community based health insurance schemes (CBHI). This paper uses longitudinal household survey data to examine dropout in the case of Ethiopia’s pilot CBHI scheme, which saw enrolment increases from 41 percent one year after inception to 48 percent a year later. An impressive 82 percent of those who enrolled in the first year renew their subscriptions, while 25 percent who had not enrolled join the scheme. The analysis shows that socio-economic status, a greater understanding of health insurance, and experience with and knowledge of the CBHI scheme reduce dropout. While there are concerns about the quality of care and the treatment meted out to the insured by providers, the overall picture is that returns from the scheme are overwhelmingly positive. For the bulk of households, premiums do not seem to be onerous, basic understanding of health insurance is high and almost all those who are currently enrolled signal their desire to renew contracts. |
| Date: | 2014–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:ems:euriss:76960&r=ias |
| By: | Ian Anderson; Andreasta Meliala; Puti Marzoeki; Edo Pambudi |
| Abstract: | Indonesia launched the national health insurance program - Jaminan Kesehatan National (JKN), on January 1, 2014, and aims to achieve universal health coverage (UHC) by 2019. Achieving UHC means not only increasing the number of people covered but also expanding the benefits package and ensuring financial protection. Although the JKN benefits package is comprehensive, a key challenge related to the capacity to deliver the promised services is ensuring the availability, distribution, and quality of human resources for health (HRH). Of Indonesia?s 33 provinces, 29 do not have the WHO recommended ratio of 1 physician per 1,000 population, although Indonesia regularly produces 6,000 to 7,000 new physicians annually. The shortage of nurses in hospitals and health centers (puskesmas) is noticeable despite the large number of graduates. The government?s health worker contract policy (PTT [Pegawai Tidak Tetap]) was the main policy lever to improve the distribution of physicians and midwives; it offered a shorter contract and higher monetary benefits for rural and remote postings. Nevertheless, evolution of the policy over more than two decades of implementation indicates that the outcome has not been totally satisfactory and that distribution problems remain. Physician maldistribution has been particularly affected by the number and concentration of hospitals in urban areas, as well as by government?s policy of allowing dual practice. Aside from HRH production and distribution figures, key information on the quality of Indonesian physicians, nurses, and midwives is limited. The latest data from the 2007 Indonesia Family Life Survey (IFLS) vignettes, which measured diagnostic and treatment ability, showed low average scores across these three integral health worker categories. Indonesia is addressing the quality issue by improving the quality assurance system of health professional education through school accreditation and graduate certification and by strengthening health professional registration and recertification systems. With these issues in mind, if Indonesia is to attain UHC by 2019, significant and concerted effort to improve the availability, distribution, and quality of human resources for health is required. |
| Keywords: | access to health care, access to health services, allocative efficiency, anesthesia, antenatal care, back pain, basic health services, birth complications, budgetary ... See More + esources, burden of disease, Center for Health, certification, child mortality, cities, citizens, cleanliness, clinics, communicable diseases, Community Health, contract arrangements, cost-effectiveness, deaths, debt, Decision making, delivery of health services, demand for health, demographic transition, dentistry, developing countries, diabetes, disability, disasters, doctors, economic growth, employment, employment opportunities, epidemiological transition, epidemiology, essential care, essential drugs, expenditures, families, financial incentive, financial incentives, financial protection, freedom of choice, gender equity, general practitioners, glucose, government policies, gross national income, growth in population, health budgets, health care demand, health care financing, health care professionals, health centers, health costs, Health Coverage, Health data, health expenditure, health expenditure Per capita, health facilities, health financing, health information, health information systems, health insurance coverage, health insurance program, Health Organization, health outcomes, health professionals, health promotion, health providers, health resources, health risks, health sector, health sector workers, Health Service, health service delivery, Health Service Management, health service providers, health services, Health Specialist, health spending, health system, HEALTH WORKERS, health workforce, Home Affairs, hospital, hospital beds, hospital sector, hospitals, household level, human resources, ill health, illness, immunization, impact evaluations, implications for health, income, income countries, inequities, Infant, Infant mortality, Infant mortality rate, injuries, insurance coverage, International Community, international comparisons, iron, labor market, labor markets, large population, leading causes, leading causes of death, life expectancy, Life expectancy at birth, live births, Local governments, low income, maternal death, maternal deaths, maternal health, maternal health outcomes, maternal mortality, maternal mortality ratio, maternal nutrition, medical care, medical doctors, Medical Education, medical fees, medical school, medical specialists, medical staff, medical support, midwife, midwifery, MIDWIVES, Millennium Development Goals, Ministry of Education, Ministry of Health, mortality, mother, national health, national health insurance, national level, Natural disasters, nature of health, needs assessment, Neonatal Mortality, newborn, newborns, number of people, nurse, NURSES, Nursing, Nutrition, obstetric services, patient, patients, pediatrics, Pharmacists, PHO, physician, PHYSICIANS, pocket payments, policy decisions, policy development, POLICY IMPLICATIONS, policy lever, policy makers, population growth, population structure, Pregnant women, premature death, prenatal care, primary care, primary health care, private hospitals, private sector, private sectors, private services, progress, Public expenditure, public health, public health care, Public health expenditure, public health providers, public hospitals, public sector, public services, pull factor, Purchasing Power, Purchasing Power Parity, quality assurance, quality of care, quality of services, reducing maternal mortality, referral system, respect, richer countries, rural areas, sanitation, scarce resources, service provision, skill level, social insurance, social insurance system, socialization, surgery, Sustainable Development, traditional healers, training opportunities, tuberculosis, Under-five mortality, urban areas, urban bias, WORKERS, World Health Organization |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:hnpdps:91324&r=ias |
| By: | Shireen Assaf (Department of Statistical Sciences, University Of Padua); Stefano Campostrini (Department of Economics, University Of Venice Cà Foscari); Cinzia Di Novi (Department of Economics, University Of Venice Cà Foscari); Fang Xu (Northrop Grumman Information Systems); Carol Gotway Crawford Author-X-Name- Carol (Department of Biostatistics and Bioinformatics Rollins School of Public Health Emory University) |
| Abstract: | Access to health care in the United States remains greatly disproportionate across socioeconomic groups. It is not known, however, whether the disparities between the socioeconomic categories are increasing or decreasing. This analysis used a well-established non-parametric technique, employing time-varying coefficient models applied to data from the 1993 to 2009 US Behavioral Risk Factor Surveillance System (BRFSS). The analysis was able to show the changes in the odds ratios of having no health insurance plan for variables of interest over time, therefore highlighting the changes in the disparities between the categories of a variable over time. While other studies have attempted to show the changes in health insurance coverage by socioeconomic groups in different time periods, there is no study to date that has shown these changes as a smooth function with time, therefore providing a clearer picture of the changes in these disparities. The results of this analysis show, for instance, that when compared with individuals with a college education or greater, those with less than a high school education showed a steady increase in the odds ratios for having no health insurance. The same trend seems applicable although in a less-clear way to Hispanics and Non-Hispanic black race-ethnicities, compared with non-Hispanic whites (the reference race category). As measures of the Affordable Care Act are being gradually implemented, studies are needed to provide baseline information about health care access disparity, in order to gauge any changes in health care access over time; BRFSS can be a useful data source in accomplishing this task. |
| Keywords: | USA, big data, disparities, health plan, health surveillance data, P-splines, temporal trends, varying coefficient model. |
| JEL: | I14 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2014:14&r=ias |
| By: | Stephan Luck (Max Planck Institute for Research on Collective Goods, Bonn); Paul Schempp (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | We provide a model that unifies the notion of self-fulfilling banking crises and sovereign debt crises. In this model, a bank run can be contagious by triggering a sovereign default, and vice versa. A deposit insurance scheme can eliminate the adverse equilibrium only if the government can repay its debt and credibly insure deposits irrespective of the performance of the financial sector. Moreover, we analyze how banking crises and sovereign defaults can be contagious across countries. We give conditions under which the implementation of a banking union is effective and costless. Finally, we discuss the current proposals for a banking union in the euro area and argue that it should be extended by a supranational Deposit Guarantee Scheme. |
| Keywords: | bank run, financial crisis, sovereign default, vicious cycle, financial contagion, banking union, deposit insurance |
| JEL: | G21 G28 H81 H63 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2014_15&r=ias |
| By: | Mebratie, A.D.; Sparrow, R.A.; Debebe, Z.Y.; Abebaw Ejigie, D.; Alemu, G.; Bedi, A.S. |
| Abstract: | In recent years there has been a proliferation of Community Based Health Insurance (CBHI) schemes designed to enhance access to modern health care services and provide financial protection to workers in the informal and rural sectors. In June 2011, the Government of Ethiopia introduced a pilot CBHI scheme in rural parts of the country. This paper assesses the impact of the scheme on utilization of modern health care and the cost of accessing health care. It adds to the relatively small body of work that provides a rigorous evaluation of CBHI schemes. We find that enrolment leads to a 30 to 41 percent increase in utilization of outpatient care at public facilities, a 45 to 64 percent increase in the frequency of visits to public facilities and at least a 56 percent decline in the cost per visit to public facilities. The effects of the scheme on out-of-pocket spending are not as clear. The impact on utilization and costs combined with a high uptake rate of almost 50 percent within two years of scheme establishment, suggests that this scheme has the potential to meet the goal of universal access to health care. |
| Keywords: | community based health insurance, outpatient healthcare utilization, out-of-pocket expenditure, Ethiopia |
| Date: | 2014–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:ems:euriss:77021&r=ias |
| By: | Groh, Matthew; McKenzie, David |
| Abstract: | Firms in many developing countries cite macroeconomic instability and political uncertainty as major constraints to their growth. Economic theory suggests uncertainty can cause firms to delay investments until uncertainty is resolved. A randomized experiment was conducted in post-revolution Egypt to measure the impact of insuring microenterprises against macroeconomic and political uncertainty. Demand for macroeconomic shock insurance was high; 36.7 percent of microentrepreneurs in the treatment group purchased insurance. However, purchasing insurance does not change the likelihood that a business takes a new loan, the size of the loan, or how the loan is invested. This lack of effect is attributed to microenterprises largely investing in inventories and raw materials rather than irreversible investments like equipment. These results suggest that, contrary to what some firms profess, macroeconomic and political risk is not inhibiting the investment behavior of microenterprises. However, insurance may still be of value to help firms cope with shocks when they do occur, but the paper is unable to examine this dimension, because the insurance product did not pay out over the course of the pilot. |
| Keywords: | Debt Markets,Climate Change Economics,Access to Finance,Bankruptcy and Resolution of Financial Distress,Insurance Law |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7048&r=ias |
| By: | Edson Araujo; Luciana Cavalini; Sabado Girardi; Megan Ireland; Magnus Lindelow |
| Abstract: | This study presents two case studies, each on a current initiative of contracting for primary health services in Brazil, one for the state of Bahia, the other for the city of Rio de Janeiro. The two initiatives are not linked and their implementation has independently sprung from a search for more effective ways of delivering public primary health care. The two models differ considerably in context, needs, modalities, and outcomes. This paper identifies their strengths and weaknesses, initially by providing a background to universal primary health care in Brazil, paying particular attention to the family health strategy, the driver of the basic health care model. It then outlines the history of contracting for health care within Brazil, before analyzing the two studies. The state of Bahia sought to expand coverage of the family health strategy and increase the quality of services, but had difficulty in attracting and retaining qualified health professionals. Rigidities in the process of public hiring led to a number of isolated contracting initiatives at the municipal level and diverse, often unstable employment contracts. The state and municipalities decided to centralize the hiring of health professionals in order to offer stable positions with career plans and mobility within the state, and chose to create a state foundation, acting under private law to manage and oversee this process. Results have been mixed as lower than expected municipal involvement resulted in relatively high administrative costs and consequent default on municipal financial contributions. The state foundation is undergoing a governance reform and has now diversified beyond hiring for primary care. The municipality of Rio de Janeiro, which until recently relied on an expansive hospital network for health care delivery, sought in particular to expand primary health services. The public health networks suffered from inefficiency and poor quality, and it was therefore decided to contract privately owned and managed, not-for-profit, social organizations to provide primary care services. The move has succeeded in attracting considerable increases in funding for primary health and coverage has increased significantly. Performance initiatives, however, still need fine-tuning and reliable information systems must be implanted in order to evaluate the system. |
| Keywords: | administrative costs, administrative rules, aged, ambulatory services, antenatal care, basic health care, birth control, block grants, Bulletin, Care Performance, chronic ... See More + disease, cities, civil society organizations, Clinics, community health, complications, contractual arrangements, deaths, decentralization, delivery of health services, developing countries, diabetes, diseases, drugs, economic inequality, Economic Policy, Economics, economies of scale, emergency care, emergency rooms, employment, equipment, essential medicines, families, Family Health, financial contributions, financial incentives, financial resources, Government capacity, Health Affairs, health care delivery, health care facilities, health care needs, health care provision, health care workers, Health Clinics, Health Coverage, health education, health facilities, health indicators, Health Inequalities, Health Information, Health Information System, Health Information Systems, health infrastructure, Health Organization, health planning, Health Policy, health professionals, health professions, health promotion, health providers, health risks, HEALTH SECTOR, health service, health service delivery, health services, health spending, Health Strategy, Health System, health system performance, Health System Reform, health systems, health workers, Healthy Life, home care, hospital, hospital management, hospital sector, hospital services, hospital system, hospitals, human resource management, human resources, human right, hypertension, illness, income, income countries, income inequality, infant, infant mortality, information asymmetry, integration, international organizations, IUD, labor market, laboratories, large populations, laws, leprosy, Life expectancy, Life expectancy at birth, live births, local governments, low birth weight, management of health, management of patients, maternal mortality, maternal mortality ratio, medical care, medical doctors, medical education, medical procedures, medical residents, Medical School, medical staff, medicines, Millennium Development Goal, Ministry of Health, morbidity, mortality, national level, nongovernmental organizations, nurse, nurses, Nutrition, oral health, outreach activities, patient, patients, Physician, pocket payments, policy decisions, policy makers, political decision, poor quality care, population density, pregnancy, pregnant women, prenatal care, primary care, PRIMARY HEALTH CARE, primary health care facilities, primary health care services, primary health facilities, primary health services, primary health system, private sector, progress, provision of care, provision of health services, public administration, public contract, public health, public health system, public policy, PUBLIC SECTOR, public services, quality improvement, quality of care, quality of services, respect, school health, Secretary of Health, service providers, service provision, social action, social participation, social security, social security benefits, social services, socioeconomic development, state policy, State University, strategic priorities, Sustainable Development, tuberculosis, universal access, universities, urban areas, vaccination, woman, workers, workforce, World Health Organization |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:hnpdps:91322&r=ias |