Implications of the Interaction Between Insurance Choice and Medical Care Demand

Richard Dusansky and Çağatay Koç

Journal of Risk & Insurance, 2010, vol. 77, issue 1, 129-144

Abstract: The gross price elasticity of demand for medical care is decomposed into two separate observable components: the medical care gross price elasticity of insurance choice and the cost‐sharing elasticity of medical care. When consumers alter their choice of health‐care plans, the price elasticity of medical care is no longer equivalent to the cost‐sharing elasticity; using the latter as a proxy for the former may produce misleading results. We present conditions under which the medical care price elasticity is positive, the case of a quasi‐Giffen good, and provide a theoretical foundation for extant empirical findings of a positive medical care price elasticity of insurance demand.

Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://doi.org/10.1111/j.1539-6975.2009.01335.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jrinsu:v:77:y:2010:i:1:p:129-144

Ordering information: This journal article can be ordered from
http://www.wiley.com/bw/subs.asp?ref=0022-4367

Access Statistics for this article

Journal of Risk & Insurance is currently edited by Joan T. Schmit

More articles in Journal of Risk & Insurance from The American Risk and Insurance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().