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Please use this identifier to cite or link to this item: http://hdl.handle.net/11299/55886

Title: Health Insurance Theory: The Case of the Vanishing Welfare Gain
Authors: Nyman, John
Issue Date: Jan-2003
Publisher: Center for Economic Research, Department of Economics, University of Minnesota
Citation: Nyman, J., (2003), "Health Insurance Theory: The Case of the Vanishing Welfare Gain", Discussion Paper No. 319, Center for Economic Research, Department of Economics, University of Minnesota.
Series/Report no.: Discussion Paper
319
Abstract: This paper presents theory that an important source of value is missing from conventional theory of the demand for health insurance, namely, the effect of the transfer of income (from those who purchase insurance and remain healthy to those who purchase insurance and become ill) on purchases of medical care. Because the portion of moral hazard that is attributable to income is welfare increasing and would replace some of moral hazard that is spuriously deemed to be welfare decreasing, the new theory suggests that the value of health insurance has been dramatically undervalued. Implications for policy are outlined.
URI: http://purl.umn.edu/55886
Appears in Collections:Discussion Papers

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