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On health insurance and household decisions: A treatment effect analysis

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  • Koch, Steven
  • Alaba, Olufunke

Abstract

In developing countries, where health insurance is not a commonly purchased financial instrument, recent debates have revolved around extending health insurance coverage to a wider range of the population, primarily via compulsory insurance schemes. However, these debates rarely consider the competing demands placed on the family budget, which will influence the acceptability of the program by the populace. In this paper, we draw on data from the 2000 income and expenditure survey to examine treatment effects associated with household insurance status, providing a detailed examination of expenditure substitution patterns within South Africa. In agreement with economic theory, the expansion of health insurance coverage via compulsory schemes creates additional burdens for households, which households accommodate via expenditure substitution. The observed variation in the household's ability to accommodate increased expenditure can and should be used in future to assess policy options and in the design of an optimal social health insurance program.

Suggested Citation

  • Koch, Steven & Alaba, Olufunke, 2010. "On health insurance and household decisions: A treatment effect analysis," Social Science & Medicine, Elsevier, vol. 70(2), pages 175-182, January.
  • Handle: RePEc:eee:socmed:v:70:y:2010:i:2:p:175-182
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    References listed on IDEAS

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    1. Steven F. Koch & Gauthier Tshiswaka-Kashalala, 2008. "Tobacco Substitution and the Poor," Working Papers 200832, University of Pretoria, Department of Economics.
    2. J. Scott Shonkwiler & Steven T. Yen, 1999. "Two-Step Estimation of a Censored System of Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 972-982.
    3. James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects, and Econometric Policy Evaluation," Econometrica, Econometric Society, vol. 73(3), pages 669-738, May.
    4. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    5. Marc Ground & Steven f Koch, 2008. "Hurdle Models Of Alcohol And Tobacco Expenditure In South African Households," South African Journal of Economics, Economic Society of South Africa, vol. 76(1), pages 132-143, March.
    6. Christelle Grobler & Ian c. Stuart, 2007. "Health Care Provider Choice," South African Journal of Economics, Economic Society of South Africa, vol. 75(2), pages 327-350, June.
    7. John, Rijo M., 2008. "Crowding out effect of tobacco expenditure and its implications on household resource allocation in India," Social Science & Medicine, Elsevier, vol. 66(6), pages 1356-1367, March.
    8. Frederic Vermeulen, 2003. "Do smokers behave differently? A tale of zero expenditures and separability concepts," Economics Bulletin, AccessEcon, vol. 4(6), pages 1-7.
    9. Bundorf, M. Kate & Pauly, Mark V., 2006. "Is health insurance affordable for the uninsured?," Journal of Health Economics, Elsevier, vol. 25(4), pages 650-673, July.
    10. Bloom, Gerald & McIntyre, Diane, 1998. "Towards equity in health in an unequal society," Social Science & Medicine, Elsevier, vol. 47(10), pages 1529-1538, November.
    11. Chou, Shin-Yi & Liu, Jin-Tan & Hammitt, James K., 2003. "National Health Insurance and precautionary saving: evidence from Taiwan," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1873-1894, September.
    12. Reza Daniels, 2008. "The income distribution with coarse data," Working Papers 82, Economic Research Southern Africa.
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    Citations

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    Cited by:

    1. Steven F. Koch & Gauthier Tshiswaka-Kashalala, 2008. "Tobacco Substitution and the Poor," Working Papers 200832, University of Pretoria, Department of Economics.
    2. Steven F. Koch & Jeffrey S. Racine, 2016. "Healthcare facility choice and user fee abolition: regression discontinuity in a multinomial choice setting," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(4), pages 927-950, October.
    3. Sheu, Ji-Tian & Lu, Jui-fen Rachel, 2014. "The spillover effect of National Health Insurance on household consumption patterns: Evidence from a natural experiment in Taiwan," Social Science & Medicine, Elsevier, vol. 111(C), pages 41-49.
    4. Dixon, Jenna & Luginaah, Isaac & Mkandawire, Paul, 2014. "The National Health Insurance Scheme in Ghana's Upper West Region: A gendered perspective of insurance acquisition in a resource-poor setting," Social Science & Medicine, Elsevier, vol. 122(C), pages 103-112.
    5. Paul Gavaza & Karen Rascati & Abiola Oladapo & Star Khoza, 2012. "The State of Health Economic Research in South Africa," PharmacoEconomics, Springer, vol. 30(10), pages 925-940, October.
    6. Khaled Makhloufi & Bruno Ventelou & Mohammad Abu-Zaineh, 2015. "Have health insurance reforms in Tunisia attained their intended objectives?," International Journal of Health Economics and Management, Springer, vol. 15(1), pages 29-51, March.
    7. Yilma, Zelalem & van Kempen, Luuk & de Hoop, Thomas, 2012. "A perverse ‘net’ effect? Health insurance and ex-ante moral hazard in Ghana," Social Science & Medicine, Elsevier, vol. 75(1), pages 138-147.

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