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Ex-ante Moral Hazard: Evidence from the Behavioral Risk Factor and Surveillance System Dataset

Author

Listed:
  • Rajendra Dulal

    (Department of Economics, Bloomsburg University, Bloomsburg, PA, USA)

  • Madhav KC

    (Yale School of Medicine, New Haven, CT, USA)

  • Kul Kapri

    (Rowan University, Glassboro, NJ, USA)

Abstract

The Ex-ante moral hazard may induce individuals with health insurance to engage in riskier behaviors than they would without insurance. This paper uses data from the Behavioral Risk Factor Surveillance System (2011- 2018) to identify the existence of the ex-ante moral hazard. We estimate the effects of health insurance on four lifestyle choices: overweight, obesity, smoking, and sedentary using a multivariate probit model. The results show that having insurance is associated with a higher probability of a sedentary lifestyle. Health insurance also increases the probability of being overweight. However, health insurance has no significant incentive effect on being obese implying that people are not obese because of health insurance. The findings also show that health insurance is associated with a decrease in the probability of smoking. This indicates the existence of potential ex-ante moral hazard in two lifestyle choices, sedentary lifestyle and overweight, but not in obesity and smoking.

Suggested Citation

  • Rajendra Dulal & Madhav KC & Kul Kapri, 2022. "Ex-ante Moral Hazard: Evidence from the Behavioral Risk Factor and Surveillance System Dataset," Journal of Development Innovations, KarmaQuest International, vol. 6(1), pages 1-15, June.
    • Handle: RePEc:kqi:journl:2022-6-1-1
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    File URL: https://karmaquest.org/journal/index.php/journal/article/view/59/49
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    Keywords

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    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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