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The Articulation Effect of Government Policy: Health Insurance Mandates Versus Taxes

  • Keith Marzilli Ericson
  • Judd B. Kessler

We examine how the articulation of government policy affects behavior. Our experiment compares a government mandate to purchase health insurance to a financially equivalent tax on the uninsured. Participants report their probability of purchasing health insurance under one of the two articulations of the policy. The experiment was conducted in four waves, from December 2011 to November 2012. We document the controversy over the Affordable Care Act's insurance mandate provision that changed the political discourse during the year. Pre-controversy, articulating the policy as a mandate, rather than a financially equivalent tax, increased probability of insurance purchase by 10.6 percentage points -- an effect comparable to a $1000 decrease in annual premiums. After the controversy, the mandate is no more effective than the tax. Our results show that how a policy is articulated affects behavior and that persuasion and public opinion management can help achieve policy objectives at lower cost.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18913.

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Date of creation: Mar 2013
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Handle: RePEc:nbr:nberwo:18913
Note: HC LE PE
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  1. Camerer, Colin F & Hogarth, Robin M, 1999. "The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 7-42, December.
  2. Horton, John Joseph & Rand, David Gertler & Zeckhauser, Richard Jay, 2010. "The Online Laboratory: Conducting Experiments in a Real Labor Market," Scholarly Articles 4448876, Harvard Kennedy School of Government.
  3. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
  4. Johnson, Eric J, et al, 1993. " Framing, Probability Distortions, and Insurance Decisions," Journal of Risk and Uncertainty, Springer, vol. 7(1), pages 35-51, August.
  5. Patricia Funk, 2007. "Is There An Expressive Function of Law? An Empirical Analysis of Voting Laws with Symbolic Fines," American Law and Economics Review, Oxford University Press, vol. 9(1), pages 135-159.
  6. Jonathan Gruber, 2011. "Massachusetts points the way to successful health care reform," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(1), pages 184-192, December.
  7. Kesternich, Iris & Heiss, Florian & McFadden, Daniel & Winter, Joachim, 2012. "Suit the action to the word, the word to the action: Hypothetical choices and real decisions in Medicare Part D," Discussion Papers in Economics 14124, University of Munich, Department of Economics.
  8. Keith M. Marzilli Ericson & Andreas Fuster, 2011. "Expectations as Endowments: Evidence on Reference-Dependent Preferences from Exchange and Valuation Experiments," The Quarterly Journal of Economics, Oxford University Press, vol. 126(4), pages 1879-1907.
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