Income Disparity, Inequity Aversion and the Design of the Healthcare System

John Leach

Scandinavian Journal of Economics, 2009, vol. 111, issue 2, 277-297

Abstract: An ex post social welfare function is used to evaluate alternative healthcare systems. If a society is averse to inequality and there is some income disparity, social welfare under private healthcare insurance is sometimes higher and sometimes lower than social welfare under public healthcare. However, a third system—public healthcare with the option to purchase supplemental healthcare insurance—is always socially preferred to private healthcare insurance. Moreover, it is either socially preferred to public healthcare or equivalent to it.

Date: 2009
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https://doi.org/10.1111/j.1467-9442.2009.01564.x

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