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Health Insurance or Food for the Family? An Examination into Unintended Consequences

Olufunke Alaba and Steven Koch ()

No 200824, Working Papers from University of Pretoria, Department of Economics

Abstract: In developing countries, where health insurance is not a commonly purchased nancial instrument, recent debates have revolved around extending health insurance coverage to a wider range of the population, primarily via compulsory insurance schemes. However, these debates rarely consider the competing demands placed on the family budget, which will un uence the acceptability of the program by the populace, and can be used to design the optimal policy. In this paper, we examine treatment e ects associated with household insurance status providing a detailed examination of expenditure substitution patterns within a highly unequal developing country. In agreement with economic theory, the expansion of health insurance coverage via compulsory schemes creates additional burdens for households, which household accommodate via expenditure substitution. The observed variation in the household's ability to accomodate increased expenditure can and should be used in future to assess policy options and design an optimal social health insurance program.

Keywords: Propensity Score Matching; Average Treatment E ects; Demand System; National Health Insurance (search for similar items in EconPapers)
JEL-codes: I11 G22 D14 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2008-07
New Economics Papers: this item is included in nep-hea and nep-ias
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