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A perverse ‘net’ effect? Health insurance and ex-ante moral hazard in Ghana

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Author Info

  • Yilma, Zelalem
  • van Kempen, Luuk
  • de Hoop, Thomas

Abstract

Incentive problems in insurance markets are well-established in economic theory. One of these incentive problems is related to reduced prevention efforts following insurance coverage (ex-ante moral hazard). This prediction is yet to be tested empirically with regard to health insurance, as the health domain is often considered relatively immune to perverse incentives, despite its validation in other insurance markets that entail adverse shocks. This paper tests for the presence of ex-ante moral hazard with reference to malaria prevention in Ghana. We investigate whether enrollment in the country's National Health Insurance Scheme (NHIS) negatively affects ownership and use of insecticide-treated bed nets (ITNs). We use a panel of 400 households in the Brong Ahafo region for this purpose and employ a propensity-adjusted household fixed effects model. Our results suggest that ex-ante moral hazard is present, especially when the level of effort and cost required for prevention is high. Implications of perverse incentive effects for the NHIS are briefly outlined.

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Bibliographic Info

Article provided by Elsevier in its journal Social Science & Medicine.

Volume (Year): 75 (2012)
Issue (Month): 1 ()
Pages: 138-147

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Handle: RePEc:eee:socmed:v:75:y:2012:i:1:p:138-147

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Related research

Keywords: Health insurance; Moral hazard; Prevention; Malaria; Bed nets; Ghana; Fixed effects model; Propensity score matching;

References

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  1. Schmidt, Christoph M. & Augurzky, Boris, 2001. "The Propensity Score: A Means to An End," IZA Discussion Papers 271, Institute for the Study of Labor (IZA).
  2. Zweifel, Peter & Manning, Willard G., 2000. "Moral hazard and consumer incentives in health care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 8, pages 409-459 Elsevier.
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  14. Caliendo, Marco & Kopeinig, Sabine, 2005. "Some Practical Guidance for the Implementation of Propensity Score Matching," IZA Discussion Papers 1588, Institute for the Study of Labor (IZA).
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  16. Joseph Mensah & Joseph R. Oppong & Christoph M. Schmidt, 2009. "Ghana’s National Health Insurance Scheme in the Context of the Health MDGs – An Empirical Evaluation Using Propensity Score Matching," Ruhr Economic Papers 0157, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  17. Alessandro Tarozzi & Aprajit Mahajan, 2011. "Time Inconsistency, Expectations and Technology Adoption: The Case of Insecticide Treated Nets," Working Papers 11-14, Duke University, Department of Economics.
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Citations

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Cited by:
  1. Powell-Jackson, Timothy & Hanson, Kara & Whitty, Christopher J.M. & Ansah, Evelyn K., 2014. "Who benefits from free healthcare? Evidence from a randomized experiment in Ghana," Journal of Development Economics, Elsevier, vol. 107(C), pages 305-319.
  2. Binagwaho, Agnes & Hartwig, Renate & Ingeri, Denyse & Makaka, Andrew, 2012. "Mutual health insurance and its contribution to improving child health in Rwanda," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-66-12, University of Passau, Faculty of Business and Economics.
  3. Wisdom Akpalu & Samuel Nii Ardey Codjoe, 2013. "Economic Analysis of Climate Variability Impact on Malaria Prevalence: The Case of Ghana," Sustainability, MDPI, Open Access Journal, vol. 5(10), pages 4362-4378, October.

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