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Income Disparity, Inequity Aversion and the Design of the Healthcare System


  • John Leach


An "ex post" social welfare function is used to evaluate alternative healthcare systems. If a society is averse to inequality and there is some income disparity, social welfare under private healthcare insurance is sometimes higher and sometimes lower than social welfare under public healthcare. However, a third system-public healthcare with the option to purchase supplemental healthcare insurance-is always socially preferred to private healthcare insurance. Moreover, it is either socially preferred to public healthcare or equivalent to it. Copyright © The editors of the "Scandinavian Journal of Economics" 2009. .

Suggested Citation

  • John Leach, 2009. "Income Disparity, Inequity Aversion and the Design of the Healthcare System," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(2), pages 277-297, June.
  • Handle: RePEc:bla:scandj:v:111:y:2009:i:2:p:277-297

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    References listed on IDEAS

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