Flu Shots, Mammograms, and the Perception of Probabilities

We study individuals' decisions to decline or accept preventive health care interventions such as flu shots and mammograms. In particular, we analyze the role of perceptions of the effectiveness of the intervention, by eliciting individuals' subjective probabilities of sickness and survival, with and without the interventions. Respondents appear to be aware of some of the qualitative relationships between risk factors and probabilities. However, on average they have very poor perceptions of the absolute probability levels as reported in the epidemiological literature. Perceptions are less accurate if a respondent is female and has no college degree. Perceived probabilities significantly affect the subsequent take-up rate of flu shots and mammograms.preventive health care, probability perceptions

Does Financial Literacy Contribute to Food Security?

Food insecurity, not having consistent access to adequate food for active, healthy lives for all household members is most common among low income households. However, income alone is not sufficient to explain who experiences food insecurity. This study investigates the relationship between financial literacy and food security. We find that low income households who exhibit financial literacy are less likely to experience food insecurity

The Impact on Consumption and Saving of Current and Future Fiscal Policies

This paper uses ESPlannerTM -- a life-cycle, financial planning model -- to investigate the potential impact of alternative fiscal policies on current consumption and saving. Studies to date have examined the response of current consumption to tax-induced temporary and permanent income changes. To our knowledge however, no study has directly examined whether consumption smoothing is actually feasible. ESPlanner's saving and life insurance recommendations generate the smoothest possible survival-state contingent lifetime consumption path for the household without putting it into debt. Such consumption smoothing is predicted by economic theory and appears to accord closely, on average, with actual behavior. By running households through ESPlanner based on current policy as well as on alternative fiscal policies, one can easily compare the program's consumption response to hypothetical tax and transfer policy changes and assess the degree to which borrowing constraints may be playing a role in determining the size of those responses. The households used in our analysis are drawn from the Federal Reserve's 1995 Survey of Consumer Finances. This data set provides detailed information on household earnings, assets, housing, demographics, and retirement plans -- all of which is used by ESPlanner in formulating its recommendations. The policies we consider are tax hikes, tax cuts, social security benefit cuts, and the elimination of tax-deferred saving. Our analysis distinguishes between immediate and future policy changes as well as between permanent and temporary ones. Our results are influenced by the fact that a majority 57 percent of our sample of households, many of which are young, is borrowing-constrained and, thus, more responsive to current than future policy changes no matter how long their duration. The results are also very sensitive to the particular policy being enacted. Income tax changes, for example, have little effect on the consumption/saving of low-income households for the simple reason their income tax liabilities are relatively small. And social security benefit cuts will have minor effects on the young because they lie so far in the future and the young are generally borrowing constrained. On the other hand, eliminating tax-deferred saving will have no effect on current retirees greatly influence the spending of the young, since such a policy would relax their borrowing constraints. The significant heterogeneity in consumption/saving responses to policy changes depending on the ages and resource levels of the households in question and the particular policy undertaken makes it difficult to summarize our quantitative findings apart from saying that each of the policies considered has a quite sizeable impact on the current consumption and saving behavior of a substantial subset of our sample.

The Mismatch Between Life Insurance Holdings and Financial Vulnerabilities: Evidence from the Survey of Consumer Finances

Using the 1995 Survey of Consumer Finances and an elaborate life-cycle model, we quantify the potential financial impact of each individual's death on his or her survivors, and we measure the degree to which life insurance moderates these consequences. Life insurance is essentially uncorrelated with financial vulnerability at every stage of the life cycle. As a result, the impact of insurance among at-risk households is modest, and substantial uninsured vulnerabilities are widespread, particularly among younger couples. Roughly two-thirds of poverty among surviving women and more than one-third of poverty among surviving men results from a failure to insure survivors against an undiminished living standard. We also identify a systematic gender bias: for any given level of financial vulnerability, couples provide significantly more protection for wives than for husbands.

The mismatch between life insurance holdings and financial vulnerabilities: evidence from the Survey of Consumer Finances

Using the 1995 Survey of Consumer Finances and an elaborate lifecycle model, we quantify the potential financial impact of each individual’s death on his or her survivors, and we measure the degree to which life insurance moderates these consequences. Life insurance is essentially uncorrelated with financial vulnerability at every stage of the life cycle. As a result, the impact of insurance among at-risk households is modest, and substantial uninsured vulnerabilities are widespread, particularly among younger couples. Roughly two-thirds of poverty among surviving women and more than one-third of poverty among surviving men results from a failure to insure survivors against an diminished living standard. We also identify a systematic gender bias: for any given level of financial vulnerability, couples provide significantly more protection for wives than for husbands.Insurance industry

Demand and pricing of preventative healthcare

This study introduces a theoretical framework for the economics of preventative healthcare. Mathematical models are used to explain how the price and utilization of prevention change depending on demand, as well as factors such as the price of a cure, the probability of illness, the efficacy of treatment, the probability of illness and cost functions. Different models are developed depending on the presence and level of health insurance and competition in preventative healthcare markets. Findings show the effect of various factors on the price of preventative healthcare, reveal the marginal effects of a change in the parameters on prices and suggest that under certain circumstances prevention is not the optimal choice

Corresponding Author

All rights reserved. No part of this paper may be reprinted or reproduced or utilised in any form or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieve system, without permission in writing from the publishers. British Library Cataloguing in Publication Data. A catalogue record for this publication is available from the British Library ISBN [978-0-85328-465-9