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Health, responsibility and taxation with a fresh start


  • Aitor Calo-Blanco

    () (Dpto. de Análisis Económico y Admon. de Empresas. University of A Coruña)


In a model where individuals differ in both their health care needs and their lifestyle preferences, we study the fair provision of health care with fresh starts. Grounded on basic ethical principles, we axiomatically derive social preferences that allow us to make welfare assessments when agents who regret their initial decisions may be granted a fresh start. Such preferences give top priority to that individual with the highest well-being difference between her actual choice and an ideal situation that entails neither regret nor health disabilities. Next, we characterise a schedule of taxes and health treatments that satisfies this social ordering. Limited by incentive-compatibility and health care needs heterogeneity, this schedule advocates balancing additional health treatments and reductions in non-medical consumption.

Suggested Citation

  • Aitor Calo-Blanco, 2015. "Health, responsibility and taxation with a fresh start," Working Papers 15.06, Universidad Pablo de Olavide, Department of Economics.
  • Handle: RePEc:pab:wpaper:15.06

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    References listed on IDEAS

    1. Fleurbaey,Marc & Maniquet,François, 2011. "A Theory of Fairness and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521715348, March.
    2. VALLETTA, Giacomo, 2012. "Health, fairness and taxation," CORE Discussion Papers 2012016, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Marc Fleurbaey & François Maniquet, 2006. "Fair Income Tax," Review of Economic Studies, Oxford University Press, vol. 73(1), pages 55-83.
    4. Bossert Walter & Pattanaik Prasanta K. & Xu Yongsheng, 1994. "Ranking Opportunity Sets: An Axiomatic Approach," Journal of Economic Theory, Elsevier, vol. 63(2), pages 326-345, August.
    5. Poutvaara, Panu & Siemers, Lars-H. R., 2008. "Smoking and social interaction," Journal of Health Economics, Elsevier, vol. 27(6), pages 1503-1515, December.
    6. Hougaard, Jens Leth & Moreno-Ternero, Juan D. & Østerdal, Lars Peter, 2013. "A new axiomatic approach to the evaluation of population health," Journal of Health Economics, Elsevier, vol. 32(3), pages 515-523.
    7. Fleurbaey, Marc & Schokkaert, Erik, 2009. "Unfair inequalities in health and health care," Journal of Health Economics, Elsevier, vol. 28(1), pages 73-90, January.
    8. Omar Paccagnella & Vincenzo Rebba & Guglielmo Weber, 2013. "VOLUNTARY PRIVATE HEALTH INSURANCE AMONG THE OVER 50s IN EUROPE," Health Economics, John Wiley & Sons, Ltd., vol. 22(3), pages 289-315, March.
    9. Osterdal, Lars Peter, 2005. "Axioms for health care resource allocation," Journal of Health Economics, Elsevier, vol. 24(4), pages 679-702, July.
    10. Fleurbaey, Marc, 2012. "Fairness, Responsibility, and Welfare," OUP Catalogue, Oxford University Press, number 9780199653591, June.
    11. Moulin, Herve, 1987. "Egalitarian-Equivalent Cost Sharing of a Public Good," Econometrica, Econometric Society, vol. 55(4), pages 963-976, July.
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    13. Maniquet, Francois & Sprumont, Yves, 2005. "Welfare egalitarianism in non-rival environments," Journal of Economic Theory, Elsevier, vol. 120(2), pages 155-174, February.
    14. FLEURBAEY, Marc & SCHOKKAERT, Erik, 2011. "Equity in health and health care," CORE Discussion Papers 2011026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    15. Marc Fleurbaey & François Maniquet, 2007. "Help the Low Skilled or Let the Hardworking Thrive? A Study of Fairness in Optimal Income Taxation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(3), pages 467-500, June.
    16. Diamond, Peter A, 1998. "Optimal Income Taxation: An Example with a U-Shaped Pattern of Optimal Marginal Tax Rates," American Economic Review, American Economic Association, vol. 88(1), pages 83-95, March.
    17. CALO-BLANCO, Aitor, 2012. "Responsibility, freedom, and forgiveness in health care," CORE Discussion Papers 2012004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    18. Aitor Calo-Blanco, 2014. "Fairness, freedom, and forgiveness in health care," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(1), pages 141-151, June.
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    More about this item


    Health; Lifestyle Preferences; Fairness; Fresh Start; Taxation.;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General

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