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Is there a 'secession of the wealthy'?: private health insurance uptake and National Health System support

Costa-i-Font, Joan and Jofre-Bonet, Mireia (2008) Is there a 'secession of the wealthy'?: private health insurance uptake and National Health System support. Bulletin of Economic Research, 60 (3). pp. 265-287. ISSN 0307-3378

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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.

Item Type: Article
Official URL: http://www3.interscience.wiley.com/journal/1185208...
Additional Information: © 2008 Blackwell Publishing
Library of Congress subject classification: H Social Sciences > H Social Sciences (General)
H Social Sciences > HV Social pathology. Social and public welfare. Criminology
Sets: Departments > European Institute
Research centres and groups > LSE Health
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 23 Jun 2008 09:01
URL: http://eprints.lse.ac.uk/5555/

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