Moral hazard and selection for voluntary deductibles

This paper investigates whether the voluntary deductible in the Dutch health insurance system reduces moral hazard or acts only as a cost reduction tool for low-risk individuals. We use a sample of 14,089 observations, comprising 2,939 individuals over seven waves from the Longitudinal Internet Studies for the Social sciences panel for the analysis. We employ bivariate models that jointly model the choice of a deductible and health care utilization and supplement the identification with an instrumental variable strategy. The results show that the voluntary deductible reduces moral hazard, especially in the decision to visit a doctor (extensive margin) compared with the number of visits (intensive margin). In addition, a robustness test shows that selection on moral hazard is not present in this context.</p

PRIVATE SAVINGS IN TRANSITION ECONOMIES: ARE THERE TERMS OF TRADE SHOCKS?

The paper examines the impact of terms of trade shocks on private savings in the transition economies after accounting for the effect of other determinants. Economic agents in the transition economies are subject to tight credit constraints which are more pronounced during bad state of nature. Thus, adverse shocks to commodity prices in the world market can force them to reduce savings by a larger amount than they would otherwise have. Empirical analysis using a dynamic panel model and data from twenty one transition economies confirm that most of the determinants of savings identified in the literature also apply to the transition economies. Favorable movements in both the permanent and transitory components of the terms of trade have a significant positive impact on private savings with transitory movements having a larger impact than the permanent component. This reflects the lack of access to foreign borrowing that many of the transition economies have faced during the last decade. Although the impact of terms of trade shocks are found to be asymmetric, the magnitude of the impact appears to be small. The results are robust for alternative estimators, determinants, and country groupings.http://deepblue.lib.umich.edu/bitstream/2027.42/39958/3/wp572.pd

When you need it or when I die? Timing of monetary transfers from parents to children

This paper investigates the timing of wealth transfers between generations. We develop an overlapping generations model in which each generation can borrow against its future income but not against expected bequest. As a result, generations relatively poorer than their parents may end up not smoothing consumption. We prove that if wealth transfers can take place earlier in life, then each generation smooths consumption despite the constraint on borrowing and the first best solution is restored. The model implies that parents transfer resources when the children are credit constrained. This implication is tested using Dutch survey data on households' intentions to make intervivos transfers matched with administrative data that allow to construct a measure of the probability of being in need of a transfer. All in all, the paper highlights the importance of intervivos transfers as a device that households can resort to in order to mitigate inter--generational wealth inequalities

Blood pressure and cholesterol level checks as dynamic interrelated screening examinations

This study analysed the determinants of screening uptake for blood pressure and cholesterol level checks. Furthermore, it investigated the presence of possible spillover effects from one type of cardiovascular screening to another type of cardiovascular screening. A dynamic random effects bivariate panel probit model with initial conditions (Wooldridge-type estimator) was adopted for the estimation. The outcome variables were the participation in blood pressure and cholesterol level checks by individuals in a given year. The balanced panel sample of 21,138 observations was constructed from 1,626 individuals from the British Household Panel Survey (BHPS) between 1996 and 2008. The analysis showed the significance of past screening behaviour for both cardiovascular screening examinations. For both cardiovascular screening examinations state dependence exist. The study also shows a significant spillover effect of the cholesterol level check on the blood pressure check and vice versa. Also a poorer health status led to a higher uptake for both types of screening examinations. Changes in recommendations have to consider the fact that taking part in one type of cardiovascular screening examination can influence the decision to take part in the other type of cardiovascular screening examination