Structural Estimation with a Randomized Trial of a Principal Agent Model of Medical Insurance with Moral Hazard
Despite the importance of principal-agent models in the development of modern economic theory, there are few estimations of these models. We contribute to fill this gap in a field where moral hazard has traditionally been considered important: the utilization of health care services. This paper presents a model where the individual decides to have treatment or not when she suffers an illness spell. The decision is taken on the basis of comparing benefits and out-of-pocket monetary costs of treatment. In the paper, we recover the estimates of the corresponding principal agent model and obtain an approximation to the optimal contract.
|Date of creation:||29 Aug 2002|
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