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Health, responsibility and taxation with a fresh start

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  • Aitor Calo-Blanco

    (Dpto. de Análisis Económico y Admon. de Empresas. University of A Coruña)

Abstract

In a model where individuals differ in both their health care needs and their lifestyle preferences, we study the fair provision of health care with fresh starts. Grounded on basic ethical principles, we axiomatically derive social preferences that allow us to make welfare assessments when agents who regret their initial decisions may be granted a fresh start. Such preferences give top priority to that individual with the highest well-being difference between her actual choice and an ideal situation that entails neither regret nor health disabilities. Next, we characterise a schedule of taxes and health treatments that satisfies this social ordering. Limited by incentive-compatibility and health care needs heterogeneity, this schedule advocates balancing additional health treatments and reductions in non-medical consumption.

Suggested Citation

  • Aitor Calo-Blanco, 2015. "Health, responsibility and taxation with a fresh start," Working Papers 15.06, Universidad Pablo de Olavide, Department of Economics.
    • Handle: RePEc:pab:wpaper:15.06
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    References listed on IDEAS

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    More about this item

    Keywords

    Health; Lifestyle Preferences; Fairness; Fresh Start; Taxation.;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General

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