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Public and private choice in UK health insurance

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  • John Hall
  • Ian Preston

    ()
    (Institute for Fiscal Studies and University College London)

Abstract

Many parts of the public sector coexist with private provision of similar services and in such circumstances we may expect to find interaction between public and private choices. Quality of publicly provided services will be a central influence on decisions whether to make use of private substitutes and use of private substitutes will feed back into attitudes towards the level of public spending. In this paper we present evidence using the British Social Attitudes Survey to show that individual take up of private medical insurance inhibits support for spending on the public health sector. Such effects have been shown to be appreciable and allowance for the joint determination of insurance decisions and attitudes magnifies the size of the estimated effects.

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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W98/19.

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Date of creation: Oct 1998
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Handle: RePEc:ifs:ifsewp:98/19

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  1. Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September.
  2. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-84, September.
  3. Stiglitz, J. E., 1974. "The demand for education in public and private school systems," Journal of Public Economics, Elsevier, vol. 3(4), pages 349-385, November.
  4. CASAMATTA, Georges & CREMER, Helmuth & PESTIEAU, Pierre, 1998. "On the political sustainability of redistributive social insurance systems," CORE Discussion Papers 1998038, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Cutler, David M & Gruber, Jonathan, 1996. "Does Public Insurance Crowd Out Private Insurance?," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 391-430, May.
  6. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
  7. Miguel Gouveia, 1997. "Majority rule and the public provision of a private good," Public Choice, Springer, vol. 93(3), pages 221-244, December.
  8. John Hall & Ian Preston, 1998. "Tax price effects on attitudes to hypothecated increases," IFS Working Papers W98/06, Institute for Fiscal Studies.
  9. Gourieroux,Christian & Monfort,Alain, 1995. "Statistics and Econometric Models," Cambridge Books, Cambridge University Press, number 9780521405515.
  10. Lindsay Brook & John Hall & Ian Preston, 1997. "What drives support for higher public spending?," IFS Working Papers W97/16, Institute for Fiscal Studies.
  11. Gourieroux,Christian & Monfort,Alain, 1995. "Statistics and Econometric Models," Cambridge Books, Cambridge University Press, number 9780521471626.
  12. Gourieroux,Christian & Monfort,Alain, 1995. "Statistics and Econometric Models," Cambridge Books, Cambridge University Press, number 9780521477451.
  13. Besley, Timothy & Hall, John & Preston, Ian, 1999. "The demand for private health insurance: do waiting lists matter?," Journal of Public Economics, Elsevier, vol. 72(2), pages 155-181, May.
  14. Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November.
  15. Gerhard Glomm & B. Ravikumar, 1998. "Opting out of publicly provided services: A majority voting result," Social Choice and Welfare, Springer, vol. 15(2), pages 187-199.
  16. Gourieroux,Christian & Monfort,Alain, 1995. "Statistics and Econometric Models," Cambridge Books, Cambridge University Press, number 9780521477444.
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Citations

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Cited by:
  1. Joan Costa & Jaume Garcia, 2001. "Demand for private health insurance: Is there a quality gap?," Economics Working Papers 531, Department of Economics and Business, Universitat Pompeu Fabra.
  2. López Nicolás, Ángel & Vera-Hernández, Marcos, 2008. "Are tax subsidies for private medical insurance self-financing? Evidence from a microsimulation model," Journal of Health Economics, Elsevier, vol. 27(5), pages 1285-1298, September.
  3. Hall, John & Preston, Ian, 2000. "Tax price effects on attitudes to hypothecated tax increases," Journal of Public Economics, Elsevier, vol. 75(3), pages 417-438, March.
  4. Chen, Alice J., 2012. "When does weight matter most?," Journal of Health Economics, Elsevier, vol. 31(1), pages 285-295.
  5. Carol Propper, 2001. "Expenditure on healthcare in the UK: a review of the issues," Fiscal Studies, Institute for Fiscal Studies, vol. 22(2), pages 151-183, June.
  6. Joan Costa & Jaume Garcia, 2003. "Demand for private health insurance: how important is the quality gap?," Health Economics, John Wiley & Sons, Ltd., vol. 12(7), pages 587-599.
  7. Andreas Bergh, 2008. "Explaining the Survival of the Swedish Welfare State: Maintaining Political Support Through Incremental Change," Financial Theory and Practice, Institute of Public Finance, vol. 32(3), pages 233-254.
  8. Ángel López-Nicolás & Marcos Vera-Hernández, 2002. "Are tax subsidies for private medical insurance self-financing? Evidence from a microsimulation model for outpatient and inpatient episodes," Economics Working Papers 632, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2004.

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