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Demand and Selection Effects in Supplemental Health Insurance in Germany

Author

Listed:
  • Renate Lange

    (University of Hohenheim)

  • Jörg Schiller

    () (University of Hohenheim)

  • Petra Steinorth

    (St. John’s University)

Abstract

Abstract This paper empirically assesses selection effects and determinants of the demand for supplemental health insurance that covers hospital and dental benefits in Germany. Our representative data set provides doctor-diagnosed indicators of the individual’s health status, risk attitude, demand for medical services and insurance purchases in other lines of insurance, as well as rich demographic and socio-economic information. Controlling for a wide range of individual preferences, we find evidence that individuals aged 65 and younger with hospital coverage are sicker than those without. In addition, insurance propensity and income are the most important drivers of the demand for supplemental hospital and dental coverage.

Suggested Citation

  • Renate Lange & Jörg Schiller & Petra Steinorth, 2017. "Demand and Selection Effects in Supplemental Health Insurance in Germany," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(1), pages 5-30, January.
  • Handle: RePEc:pal:gpprii:v:42:y:2017:i:1:d:10.1057_s41288-016-0023-2
    DOI: 10.1057/s41288-016-0023-2
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    supplemental health insurance; asymmetric information; one-sided commitment; insurance demand; German statutory health insurance; insurance propensity;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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