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Health Insurance and Life Style Choices: Identifying the Ex Ante Moral Hazard

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  • STANCIOLE Anderson

Abstract

There is extensive debate in the literature about the practical significance of the concept of ex-ante moral hazard. This paper uses data from the 1999-2003 PSID waves to estimate a structural model of individual choice of insurance coverage and four life style related decisions: heavy smoking, heavy drinking, sedentarism and obesity. The results show that health insurance has significant incentive effects on life style choices, increasing the propensity to heavy smoking, sedentarism and obesity. Somewhat surprisingly, however, health insurance decreases the propensity to heavy drinking. There is also significant correlation among the errors of each equation. The results might also have implications for the design of health financing policies.

Suggested Citation

  • STANCIOLE Anderson, 2007. "Health Insurance and Life Style Choices: Identifying the Ex Ante Moral Hazard," IRISS Working Paper Series 2007-10, IRISS at CEPS/INSTEAD.
    • Handle: RePEc:irs:iriswp:2007-10
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    Cited by:

    1. Aida Isabel Tavares, 2014. "Health insurance and lifestyles," Applied Economics, Taylor & Francis Journals, vol. 46(16), pages 1910-1923, June.
    2. repec:cup:judgdm:v:8:y:2013:i:2:p:174-178 is not listed on IDEAS
    3. FOUARGE Didier & MUFFELS Ruud & PAVLOPOULOS Dimitris & VERMUNT Jeroen K., 2007. "Who benefits from a job change: The dwarfs or the giants?," IRISS Working Paper Series 2007-16, IRISS at CEPS/INSTEAD.
    4. Chenhao Yu & Huigang Liang & Zhiruo Zhang, 2022. "Does Health Insurance Reduce the Alcohol Consumption? Evidence from China Health and Nutrition Survey," Sustainability, MDPI, vol. 14(9), pages 1-10, May.
    5. Lorenzo Corsini, 2012. "Institutions, Technological Change and Wage Differentials between Skilled and Unskilled Workers: Theory and Evidence from Europe," Research in Labor Economics, in: Research in Labor Economics, pages 1-33, Emerald Group Publishing Limited.
    6. repec:cup:judgdm:v:8:y:2013:i:2:p:161-173 is not listed on IDEAS
    7. MARTIN Ludivine, 2007. "The impact of technological changes on incentives and motivations to work hard," IRISS Working Paper Series 2007-15, IRISS at CEPS/INSTEAD.
    8. Philippe P. F. M. van de Calseyde & Gideon Keren & Marcel Zeelenberg, 2013. "The insured victim effect: When and why compensating harm decreases punishment recommendations," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 8(2), pages 161-173, March.
    9. Dhaval M. Dave & Robert Kaestner & George L. Wehby, 2015. "Does Medicaid Coverage for Pregnant Women Affect Prenatal Health Behaviors?," NBER Working Papers 21049, National Bureau of Economic Research, Inc.
    10. Orit E. Tykocinski, 2013. "The insurance effect: How the possession of gas masks reduces the likelihood of a missile attack," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 8(2), pages 174-178, March.
    11. PREJMEREAN Mihaela Cornelia & VASILACHE Simona, 2008. "What's a univesity worth? Changes in the lifestyle and status of post-2000 European Graduates," IRISS Working Paper Series 05, IRISS at CEPS/INSTEAD.
    12. LILLA Marco, 2007. "Income Inequality and Education Premia," IRISS Working Paper Series 2007-11, IRISS at CEPS/INSTEAD.
    13. Prejmerean, Mihaela Cornelia & Vasilache, Simona, 2008. "What's a university worth? Changes in the lifestyle and status of post-2000 European Graduates," IRISS Working Paper Series 2008-05, IRISS at CEPS/INSTEAD.

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    More about this item

    Keywords

    ex ante moral hazard; insurance; life Style; Max Simulated Likelihood;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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