Health, responsibility and taxation with a fresh start

Aitor Calo-Blanco ()
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Aitor Calo-Blanco: Dpto. de Análisis Económico y Admon. de Empresas. University of A Coruña

No 15.06, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: In a model where individuals differ in both their health care needs and their lifestyle preferences, we study the fair provision of health care with fresh starts. Grounded on basic ethical principles, we axiomatically derive social preferences that allow us to make welfare assessments when agents who regret their initial decisions may be granted a fresh start. Such preferences give top priority to that individual with the highest well-being difference between her actual choice and an ideal situation that entails neither regret nor health disabilities. Next, we characterise a schedule of taxes and health treatments that satisfies this social ordering. Limited by incentive-compatibility and health care needs heterogeneity, this schedule advocates balancing additional health treatments and reductions in non-medical consumption.

Keywords: Health; Lifestyle Preferences; Fairness; Fresh Start; Taxation. (search for similar items in EconPapers)
JEL-codes: D63 D71 H20 I10 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2015-05
New Economics Papers: this item is included in nep-hea and nep-pbe
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