Resource title

The Theory of the Demand for Health Insurance

Resource image

image for OpenScout resource :: The Theory of the Demand for Health Insurance

Resource description

Conventional theory holds that moral hazard -- the additional health care purchased as a result of becoming insured -- is an opportunistic price response and is welfare-decreasing because the value of the additional health care purchased is less than its costs. The theory of the demand for health insurance presented here suggests that moral hazard is primarily an income transfer effect. In an estimation based on parameters from the literature, the value of moral hazard consumption is found to be 3 times greater than its costs, suggesting that income transfer effects dominate price effects and that moral hazard is welfare-increasing.

Resource author

John A. Nyman

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/23491

Resource license

Adapt according to the presented license agreement and reference the original author.