Adverse Selection in Elderly Care
AbstractThis paper provides a theoretical model to analyse public funding of family elderly care when two severity type are present (the high and the low), under asymmetry of information and increasing costs. The social planner can redistribute between households, but because of incomplete information he is prevented from observing the type of household. The welfare optimum is characterized both under full and asymmetric information. Under complete information it turns out that the transfer has to be set in such a way to induce equality in the marginal utility of income. The direction of the transfer is no longer clear-cut (both under complete and asymmetric information). Specifically it cannot be ruled out that the transfer flows from the high severity / high cost type to the low severity /low cost type, where intuitively one would expect the opposite.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Genoa, Research Doctorate in Public Economics in its series DEP - series of economic working papers with number 7/2011.
Date of creation: Nov 2011
Date of revision:
Contact details of provider:
Postal: University of Genoa c/o Marcello Montefiori via Vivaldi, 5 16126 Genova ITALY
Fax: +39 010 209 5223
Web page: http://www.dep.unige.it/
More information through EDIRC
asymmetric information; adverse selection; elderly care; redistribution;
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cornes, Richard C. & Silva, Emilson C. D., 2002.
"Local public goods, inter-regional transfers and private information,"
European Economic Review,
Elsevier, vol. 46(2), pages 329-356, February.
- Richard C. Cornes & Emilson C.D. Silva, 1996. "Local Public Goods, Inter-Regional Transfers and Private Information," Keele Department of Economics Discussion Papers (1995-2001) 96/11, Department of Economics, Keele University.
- Boadway, Robin & Pestieau, Pierre & Wildasin, David E, 1989. "Non-cooperative Behavior and Efficient Provision of Public Goods," Public Finance = Finances publiques, , vol. 44(1), pages 1-7.
- Heitmueller, Axel & Inglis, Kirsty, 2007. "The earnings of informal carers: Wage differentials and opportunity costs," Journal of Health Economics, Elsevier, vol. 26(4), pages 821-841, July.
- Caplan, Arthur J. & Cornes, Richard C. & Silva, Emilson C. D., 2000. "Pure public goods and income redistribution in a federation with decentralized leadership and imperfect labor mobility," Journal of Public Economics, Elsevier, vol. 77(2), pages 265-284, August.
- Buchholz, Wolfgang & Konrad, Kai A., 1995. "Strategic transfers and private provision of public goods," Journal of Public Economics, Elsevier, vol. 57(3), pages 489-505, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marcello Montefiori).
If references are entirely missing, you can add them using this form.