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Sharing Health Risk and Income Risk within Households: Evidence from Japanese Data

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  • Atsushi Yoshida
  • Young-Sook Kim
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    Abstract

    We examine the question of which household members should consume medical services, and in what quantities, by using Japanese household-level data. We employ two key concepts, health risk and income risk, and investigate whether family heads or dependents bear these risks. Health risk is the risk that a household member falls ill, while income risk is the risk that future household income decreases. We find that both heads and dependents make fewer visits to doctors as household size increases. We also find that only dependents visited doctors less frequently following the reform of the public health insurance system, which raised the co-payment rate of family heads from 10% to 20%. These findings imply that heads and dependents share health risk but dependents bear income risk

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    File URL: http://repec.org/esFEAM04/up.1407.1080265878.pdf
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    Bibliographic Info

    Paper provided by Econometric Society in its series Econometric Society 2004 Far Eastern Meetings with number 583.

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    Date of creation: 11 Aug 2004
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    Handle: RePEc:ecm:feam04:583

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    Keywords: co-payment; health risk; income risk; public health insurance;

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    1. Bourguignon, Francois & Chiappori, Pierre-Andre, 1992. "Collective models of household behavior : An introduction," European Economic Review, Elsevier, vol. 36(2-3), pages 355-364, April.
    2. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
    3. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    4. Winfried Pohlmeier & Volker Ulrich, 1995. "An Econometric Model of the Two-Part Decisionmaking Process in the Demand for Health Care," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 339-361.
    5. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
    6. Atsushi Yoshida & Shingo Takagi, 2002. "Effects of the Reform of the Social Medical Insurance System in Japan," The Japanese Economic Review, Japanese Economic Association, vol. 53(4), pages 444-465.
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