Post by Sapphire Capital on Aug 14, 2008 20:50:50 GMT 4
Is There a Secession of the Wealthy? Private Health Insurance Uptake and National Health System Support
Joan Costa-Font
London School of Economics and Political Science (LSE)
Mireia Jofre-Bonet
City University London - Department of Economics
Bulletin of Economic Research, Vol. 60, Issue 3, pp. 265-287, July 2008
Abstract:
The purchase of private health insurance (PHI) as a means to partially supplement the National Health System (NHS) coverage is often regarded as a potential signal for a declining support for the NHS. Exploiting the fact that PHI is typically purchased by the most affluent, in this paper we test the so called secession of the wealthy hypothesis whereby the likelihood of expressing lack of support for the NHS increases with having supplementary PHI. Using empirical data from Catalonia, we draw upon an empirical strategy that circumvents an obvious simultaneity problem by estimating both a recursive bivariate probit as well as an IV probit. After controlling for insurance premium, household income and other socio-demographic determinants, we find that the purchase of PHI reduces the propensity of individuals to support the NHS. We also find evidence that PHI is a luxury good and sensitive to fiscal incentives.
papers.ssrn.com/sol3/papers.cfm?abstract_id=1146700
Joan Costa-Font
London School of Economics and Political Science (LSE)
Mireia Jofre-Bonet
City University London - Department of Economics
Bulletin of Economic Research, Vol. 60, Issue 3, pp. 265-287, July 2008
Abstract:
The purchase of private health insurance (PHI) as a means to partially supplement the National Health System (NHS) coverage is often regarded as a potential signal for a declining support for the NHS. Exploiting the fact that PHI is typically purchased by the most affluent, in this paper we test the so called secession of the wealthy hypothesis whereby the likelihood of expressing lack of support for the NHS increases with having supplementary PHI. Using empirical data from Catalonia, we draw upon an empirical strategy that circumvents an obvious simultaneity problem by estimating both a recursive bivariate probit as well as an IV probit. After controlling for insurance premium, household income and other socio-demographic determinants, we find that the purchase of PHI reduces the propensity of individuals to support the NHS. We also find evidence that PHI is a luxury good and sensitive to fiscal incentives.
papers.ssrn.com/sol3/papers.cfm?abstract_id=1146700