Genetic testing, income distribution and insurance markets, CHERE Working Paper 2006/3
This paper analyses the policy implications for health insurance markets of the development of genetic testing. A central issue surrounding this development is whether insurers should be allowed access to the information provided by such tests. The paper first shows that on efficiency grounds alone, insurance buyers should be allowed voluntarily to supply this information to insurers. The source of the considerable opposition to this proposal is really the distributional implications: those with the worst genetic endowments will as a result have to pay the highest insurance premiums. The paper then goes on to analyse possible redistributional policies that can remedy this. In doing so, it makes a significant departure from the mainstream literature on adverse selection in insurance markets, by assuming that individuals have differing income endowments.
|Date of creation:||Jul 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +61 2 9514 9799
Fax: 61 2 9514 4730
Web page: http://www.chere.uts.edu.au
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael Smart, 1996.
"Competitive Insurance Markets with Two Unobservables,"
msmart-96-01, University of Toronto, Department of Economics.
- Smart, Michael, 2000. "Competitive Insurance Markets with Two Unobservables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 153-69, February.
- Hoy, Michael & Polborn, Mattias, 2000. "The value of genetic information in the life insurance market," Journal of Public Economics, Elsevier, vol. 78(3), pages 235-252, November.
- Michael Hoy & Fabienne Orsi & FranÁois Eisinger & Jean Paul Moatti, 2003.
"The Impact of Genetic Testing on Healthcare Insurance,"
The Geneva Papers on Risk and Insurance,
The International Association for the Study of Insurance Economics, vol. 28, pages 203-221, 04.
- Michael Hoy & Fabienne Orsi & Fran�ois Eisinger & Jean Paul Moatti, 2003. "The Impact of Genetic Testing on Healthcare Insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 28(2), pages 203-221, April.
- Crocker, Keith J. & Snow, Arthur, 1992. "The social value of hidden information in adverse selection economies," Journal of Public Economics, Elsevier, vol. 48(3), pages 317-347, August.
- Strohmenger, R. & Wambach, A., 2000. "Adverse selection and categorical discrimination in the health insurance markets: the effects of genetic tests," Journal of Health Economics, Elsevier, vol. 19(2), pages 197-218, March.
- David M. Cutler & Richard J. Zeckhauser, 1998.
"Adverse Selection in Health Insurance,"
in: Frontiers in Health Policy Research, Volume 1, pages 1-32
National Bureau of Economic Research, Inc.
- David M. Cutler & Richard J. Zeckhauser, 1999.
"The Anatomy of Health Insurance,"
NBER Working Papers
7176, National Bureau of Economic Research, Inc.
- Tabarrok, Alexander, 1994. "Genetic testing: An economic and contractarian analysis," Journal of Health Economics, Elsevier, vol. 13(1), pages 75-91, March.
- Hoy, Michael, 1982. "Categorizing Risks in the Insurance Industry," The Quarterly Journal of Economics, MIT Press, vol. 97(2), pages 321-36, May.
- Hoy, Michael, 1989. "The value of screening mechanisms under alternative insurance possibilities," Journal of Public Economics, Elsevier, vol. 39(2), pages 177-206, July.
- Doherty, Neil A. & Thistle, Paul D., 1996. "Adverse selection with endogenous information in insurance markets," Journal of Public Economics, Elsevier, vol. 63(1), pages 83-102, December.
- Wilson, Charles, 1977. "A model of insurance markets with incomplete information," Journal of Economic Theory, Elsevier, vol. 16(2), pages 167-207, December.
- Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
- Hirshleifer, Jack, 1971. "The Private and Social Value of Information and the Reward to Inventive Activity," American Economic Review, American Economic Association, vol. 61(4), pages 561-74, September.
- Harris Milton & Townsend, Robert M, 1981. "Resource Allocation under Asymmetric Information," Econometrica, Econometric Society, vol. 49(1), pages 33-64, January.
When requesting a correction, please mention this item's handle: RePEc:her:chewps:2006/3. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Liz Chinchen)
If references are entirely missing, you can add them using this form.