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Prevention of diseases and preventive co-payment rate

Author

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  • François Maréchal

    () (CRESE, University of Franche-Comté (France))

Abstract

In this paper, we use the Rank-Dependent Expected-Utility (RDEU) model to analyse the preventive behaviour of an individual faced with the risk of being sick. The RDEU model makes it possible to take into account the way economic agents perceive the risk of being sick in the future. We first exhibit the condition under which the level of prevention chosen by the agent is higher or lower than the first best level. Then, we determine the optimal level of preventive co-payment rate which implements the first best level of prevention.

Suggested Citation

  • François Maréchal, 2009. "Prevention of diseases and preventive co-payment rate," Economics Bulletin, AccessEcon, vol. 29(3), pages 2333-2342.
  • Handle: RePEc:ebl:ecbull:eb-09-00141
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P78.pdf
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    References listed on IDEAS

    as
    1. Sandmo, Agnar, 1983. "Ex Post Welfare Economics and the Theory of Merit Goods," Economica, London School of Economics and Political Science, vol. 50(197), pages 19-33, February.
    2. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
    3. Chou, Shin-Yi & Grossman, Michael & Saffer, Henry, 2004. "An economic analysis of adult obesity: results from the Behavioral Risk Factor Surveillance System," Journal of Health Economics, Elsevier, vol. 23(3), pages 565-587, May.
    4. Yaari, Menahem E, 1987. "The Dual Theory of Choice under Risk," Econometrica, Econometric Society, vol. 55(1), pages 95-115, January.
    5. Chateauneuf, Alain & Cohen, Michele, 1994. "Risk Seeking with Diminishing Marginal Utility in a Non-expected Utility Model," Journal of Risk and Uncertainty, Springer, vol. 9(1), pages 77-91, July.
    6. Kai A. Konrad & Stergios Skaperdas, 1993. "Self-Insurance and Self-Protection: A Nonexpected Utility Analysis," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 18(2), pages 131-146, December.
    7. W. Kip Viscusi, 1995. "Government Action, Biases in Risk Perception, and Insurance Decisions," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 20(1), pages 93-110, June.
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    More about this item

    Keywords

    Prevention; Co-payment rate; Rank-Dependent Expected-Utility;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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