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Separating Selection and Incentive Effects: an Econometric Study of Swiss Health Insurance Claims Data


  • Pierre-Yves Geoffard

    (PJSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris, Institut d'économie et de management de la santé (IEMS) - UNIL - Université de Lausanne, CEPR - Center for Economic Policy Research - CEPR)

  • Lucien Gardiol

    (Institut d'économie et de management de la santé (IEMS) - UNIL - Université de Lausanne)

  • Chantal Grandchamp

    (CEPR - Center for Economic Policy Research - CEPR)


This paper presents an empirical analysis of the link between health insurance coverage and health care expenditures. We use claims data for over 60 000 adult individuals covered by a major Swiss Health Insurance Fund, followed for up to four years. In the Swiss health insurance system, each individual can choose between five plans, corresponding to different levels of annual deductible. The data show a strong positive correlation between coverage and expenditure. We provide a simple method to separate selection effects (due to individual choice of coverage) and incentive effects (" moral hazard "). The method only requires that there exists an observable variable: 1. correlated with the unobservable health status; 2. not affected by incentives. The analysis of mortality rates indicates important selection effects, which is confirmed by the data on inpatient care. However, the positive correlation between coverage and outpatient expenditure is not fully explained by selection effects, and moral hazard effects are of the same order of magnitude.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Pierre-Yves Geoffard & Lucien Gardiol & Chantal Grandchamp, 2006. "Separating Selection and Incentive Effects: an Econometric Study of Swiss Health Insurance Claims Data," Post-Print halshs-00754832, HAL.
  • Handle: RePEc:hal:journl:halshs-00754832
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    Cited by:

    1. Pau Olivella & Marcos Vera-Hernández, 2006. "Testing for Asymmetric Information in Private Health Insurance," Working Papers 246, Barcelona Graduate School of Economics.
    2. Lucien Gardiol & Pierre-Yves Geoffard & Chantal Grandchamp, 2005. "Separating selection and incentive effects in health insurance," PSE Working Papers halshs-00590713, HAL.
    3. Vincenzo Atella & Alberto Holly & Alessandro Mistretta, 2016. "Disentangling Adverse Selection, Moral Hazard and Supply Induced Demand: An Empirical Analysis of The Demand For Healthcare Services," CEIS Research Paper 389, Tor Vergata University, CEIS, revised 31 Oct 2018.
    4. World Bank, 2009. "Europe and Central Asia - Health insurance and competition," World Bank Other Operational Studies 3064, The World Bank.

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