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Private Medical Insurance and Saving: Evidence from the British Household Panel Survey

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Author Info
Alessandra Guariglia () (University of Kent, Canterbury)
Mariacristina Rossi () (University of Rome II - Faculty of Economics)

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Abstract

This paper uses the British Household Panel Survey for the years 1996 to 2000 to investigate whether individuals in the UK save for precautionary motives against uncertain medical costs. In particular, we test the hypothesis that those individuals who are not covered by private medical insurance, and who are therefore more exposed to facing unexpected health care expenditures or loss of income while waiting for treatment, tend to save more than those who are covered. According to our findings, which are based on a wide range of econometric specifications, there is a positive association between insurance coverage and saving, suggesting that private medical insurance does not crowd out private saving. This relationship is however weaker in areas where people feel the quality of medical facilities to be poor and in rural areas.

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File URL: ftp://www.ceistorvergata.it/repec/rpaper/No-39-Guariglia,Rossi.pdf
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Publisher Info
Paper provided by Tor Vergata University, CEIS in its series CEIS Research Paper with number 39.

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Length: 36
Date of creation: 20 Nov 2003
Date of revision:
Handle: RePEc:rtv:ceisrp:39

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Postal: CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma
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Related research
Keywords: precautionary saving; private medical insurance;

Other versions of this item:

Find related papers by JEL classification:
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

References listed on IDEAS
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.:

  1. Gravelle, Hugh & Dusheiko, Mark & Sutton, Matthew, 2002. "The demand for elective surgery in a public system: time and money prices in the UK National Health Service," Journal of Health Economics, Elsevier, vol. 21(3), pages 423-449, May. [Downloadable!] (restricted)
  2. Starr-McCluer, Martha, 1996. "Health Insurance and Precautionary Savings," American Economic Review, American Economic Association, vol. 86(1), pages 285-95, March.
    Other versions:
  3. 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. [Downloadable!] (restricted)
    Other versions:
  4. Palumbo, Michael G, 1999. "Uncertain Medical Expenses and Precautionary Saving Near the End of the Life Cycle," Review of Economic Studies, Blackwell Publishing, vol. 66(2), pages 395-421, April. [Downloadable!] (restricted)
  5. Christopher D. Carroll & Andrew A. Samwick, 1998. "How Important Is Precautionary Saving?," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 410-419, August. [Downloadable!] (restricted)
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  6. Merrigan, Philip & Normandin, Michel, 1996. "Precautionary Saving Motives: An Assessment from UK Time Series of Cross-Sections," Economic Journal, Royal Economic Society, vol. 106(438), pages 1193-1208, September. [Downloadable!] (restricted)
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  7. Mark Kazarosian, 1993. "Precautionary Savings- A Panel Study," Boston College Working Papers in Economics 247, Boston College Department of Economics.
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  8. Dardanoni, Valentino, 1991. "Precautionary Savings under Income Uncertainty: A Cross-Sectional Analysis," Applied Economics, Taylor and Francis Journals, vol. 23(1), pages 153-60, Part B, J.
  9. Nickell, Stephen & Nicolitsas, Daphne, 1999. "How does financial pressure affect firms?," European Economic Review, Elsevier, vol. 43(8), pages 1435-1456, August. [Downloadable!] (restricted)
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  10. Alessandra Guariglia & Byung-Yeon Kim, 2003. "The Effects of Consumption Variability on Saving: Evidence from a Panel of Muscovite Households," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(3), pages 357-377, 07. [Downloadable!] (restricted)
  11. Alessandra Guariglia, 2001. "Saving behaviour and earnings uncertainty: Evidence from the British Household Panel Survey," Journal of Population Economics, Springer, vol. 14(4), pages 619-634. [Downloadable!] (restricted)
  12. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Discussion Papers 96-01, University of Copenhagen. Department of Economics.
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  13. Christopher D. Carroll & Karen E. Dynan & Spencer D. Krane, 1999. "Unemployment risk and precautionary wealth: evidence from households' balance sheets," Finance and Economics Discussion Series 1999-15, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
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  14. Alessandra Guariglia, 2002. "Consumption, habit formation, and precautionary saving: evidence from the British Household Panel Survey," Oxford Economic Papers, Oxford University Press, vol. 54(1), pages 1-19, January.
  15. Laurence J. Kotlikoff, 1986. "Health Expenditures and Precautionary Savings," NBER Working Papers 2008, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. James Banks & Richard Blundell & Agar Brugiavini, 1999. "Risk pooling, precautionary saving and consumption growth," IFS Working Papers W99/19, Institute for Fiscal Studies.
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  17. Propper, Carol, 2000. "The demand for private health care in the UK," Journal of Health Economics, Elsevier, vol. 19(6), pages 855-876, November. [Downloadable!] (restricted)
  18. Alessie, Rob & Lusardi, Annamaria, 1997. "Saving and income smoothing: Evidence from panel data," European Economic Review, Elsevier, vol. 41(7), pages 1251-1279, July. [Downloadable!] (restricted)
  19. Propper, Carol & Rees, Hedley & Green, Katherine, 2001. "The Demand for Private Medical Insurance in the UK: A Cohort Analysis," Economic Journal, Royal Economic Society, vol. 111(471), pages C180-200, May. [Downloadable!] (restricted)
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  20. Carroll, Christopher D. & Samwick, Andrew A., 1997. "The nature of precautionary wealth," Journal of Monetary Economics, Elsevier, vol. 40(1), pages 41-71, September. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, 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.)

  1. Wagstaff, Adam & Pradhan, Menno, 2005. "Health insurance impacts on health and nonmedical consumption in a developing country," Policy Research Working Paper Series 3563, The World Bank. [Downloadable!]
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