Demand for private health insurance: how important is the quality gap?

Costa-i-Font, Joan ORCID: 0000-0001-7174-7919 and Garcia, Jaume (2003) Demand for private health insurance: how important is the quality gap? Health Economics, 12 (7). pp. 587-599. ISSN 1057-9230

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Abstract

Perceived quality of private and public health care, income and insurance premium are among the determinants of demand for private health insurance (PHI). In the context of a model in which individuals are expected utility maximizers, the non purchasing choice can result in consuming either public health care or private health care with full cost paid out-of-pocket. This paper empirically analyses the effect of the determinants of the demand for PHI on the probability of purchasing PHI by estimating a pseudo-structural model to deal with missing data and endogeneity issues. Our findings support the hypothesis that the demand for PHI is indeed driven by the quality gap between private and public health care. As expected, PHI is a normal good and a rise in the insurance premium reduces the probability of purchasing PHI albeit displaying price elasticities smaller than one in absolute value for different groups of individuals.

Item Type:	Article
Official URL:	http://www3.interscience.wiley.com/journal/5749/ho...
Additional Information:	© 2003 John Wiley and Sons, Ltd
Divisions:	Social Policy European Institute LSE Health
Subjects:	H Social Sciences > H Social Sciences (General)
Date Deposited:	25 Jul 2008 08:32
Last Modified:	01 Nov 2024 04:17
URI:	http://eprints.lse.ac.uk/id/eprint/19931

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