Redistribution at the hospital

This paper studies redistribution by means of a public supply of medical treatment. We show that the government can redistribute income towards low-ability individuals in a world of asymmetric information by offering bundles of medical treatment and redistributive payment. If self-selection is a problem, then the separating scheme offers high-ability individuals complete treatment against a high payment, and low-ability individuals partial treatment against a low payment. In particular, the level of treatment offered low-ability individuals is distorted downwards.health; medical treatment; insurance; redistribution; self-selection

Health Insurance: Treatment vs. Compensation

In this paper, we view health insurance as a combined hedge against the two consequences of falling ill: treatment expenditures and loss in income. We discuss how an individual’s ability when healthy affects her decision on whether to buy health insurance with treatment to full recovery if ill or with partial treatment combined with cash compensation for the resulting loss in income. We find that a highability individual demands full recovery and is fully insured, while a low-ability individual demands partial treatment and cash compensation and is only partly insured.Health Insurance; Treatment; Compensation

The Road to Higher Prices: Will Improved Road Standards Lead to Higher Housing Prices?

publishedVersio

The Road to Higher Prices: Will Improved Road Standards Lead to Higher Housing Prices?

publishedVersio

Health insurance: medical treatment vs. disability payment

We present arguments for treating health insurance and disability insurance in an integrated manner in economic analysis, based on a model where each individual's utility depends on both consumption and health and her income depends on her earning ability. When purchasing insurance, she may choose a contract that offers less than full medical treatment. We find that high-ability individuals demand full recovery and equalize utility across states, while low-ability individuals demand partial treatment and cash compensation and suffer a loss in utility if ill. Our results carry over to the case where health states are not observable. NOTICE: this is the author’s version of a work that was accepted for publication in Research in Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Research in Economic

Direct and Indirect Effects of Housing Market Policies using an Augmented DiPasquale-Wheaton framework

This paper analyses a set of housing market policies in an augmented DiPasquale-Wheaton (ADPW) model where the price-rent (PR) ratio ensures housing market equilibrium across different types of tenure. The aim of the paper is educational, putting several housing market policies into a comprehensive context where the rental housing market, the housing construction industry and the market for owner-occupied housing are interrelated. Housing market dynamics takes both direct and indirect effects into account. The paper finds that introducing tax-deductible mortgage interest rates has a positive effect on house prices. This policy stimulates housing starts and pushes down rental prices. A property tax has a negative effect on house prices while lifting the rental price as the housing industry contracts. Social housing policy interventions on the supply side of the housing market partly crowd out commercial housing supply. Demand-side vouchers have stronger short-run effects as long-run effects incorporate the housing construction industry’s reaction to house price signals. Finally, rental subsidies create a gap between the rent paid by a tenant and the rent received by a landlord. The aggregate effect of a rental subsidy is related to the elasticities of supply and demand, where not only renters, but also homeowners and landlords, may benefit when supply and demand are very elastic

Health Insurance: Medical Treatment vs. Disability Payment

Abstract In this paper we integrate health insurance and disability insurance, which have been treated separately so far in the economics literature. We do this by viewing health insurance as a combined hedge against the two consequences of falling ill: treatment expenditures and loss in income due to permanent impairment. We discuss how an individual's (pre-illness) ability a¤ects her decision on health insurance coverage if ill: whether to choose treatment to full recovery or partial treatment combined with cash compensation for the resulting loss in income. We …nd that a high-ability individual demands full recovery and equalizes utility across states, while a low-ability individual demands partial treatment and cash compensation and su¤ers a loss in utility if ill. JEL Nos.: I11, G22, D81 We are grateful to Agnar Sandmo, Sören Blomquist, and participants at the EEA Conference and the Oslo workshop on health economics, for helpful comments on earlier versions