Incentives and Government Relief for Risk
AbstractGovernment relief is offered for a wide range of risks - - natural disaster, economic dislocation, sickness and injury. This paper explores the effect of such relief on incentives and the allocation of risk in a model with private insurance. It is shown that government relief is inefficient, even when its level is less than the private insurance coverage that individuals would otherwise have purchased and even when private insurance coverage is incomplete due to problems of moral hazard.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3007.
Date of creation: Jun 1989
Date of revision:
Publication status: published as Journal of Risk and Uncertainty, Vol. 4, No. 2, pp. 167-175, (1991).
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
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"An Analysis of the Principal-Agent Problem,"
Levine's Working Paper Archive
391749000000000339, David K. Levine.
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Bell Journal of Economics,
The RAND Corporation, vol. 10(1), pages 74-91, Spring.
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"Moral Hazard and Optimal Commodity Taxation,"
500, Queen's University, Department of Economics.
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