Genetic testing with primary prevention and moral hazard
We develop a model where a genetic test reveals whether an individual has a low or high probability of developing a disease. A costly prevention effort allows high-risk agents to decrease this probability. Agents are not obliged to take the test, but must disclose its results to insurers, and taking the test is associated to a discrimination risk. We study the individual decisions to take the test and to undertake the prevention e¤ort as a function of the effort cost and of its efficiency. If effort is observable by insurers, agents undertake the test only if the effort cost is neither too large nor too low. If the effort cost is not observable by insurers, moral hazard increases the value of the test if the e¤ort cost is low. We offer several policy recommendations, from the optimal breadth of the tests to policies to do away with the discrimination risk.
|Date of creation:||11 May 2012|
|Date of revision:|
|Publication status:||Published in Journal of Health Economics, vol.�32, n°5, septembre 2013, p.�768-779.|
|Contact details of provider:|| Phone: (+33) 5 61 12 86 23|
Web page: http://www.tse-fr.eu/
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.:
- Lilia Filipova & Michael Hoy, 2009. "Impact of Genetic Testing on Surveillance and Prevention," Working Papers 0904, University of Guelph, Department of Economics and Finance.
- DIONNE, George & EECKHOUDT, Louis, .
"Self-insurance, self-protection and increased risk aversion,"
CORE Discussion Papers RP
623, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Dionne, Georges & Eeckhoudt, Louis, 1985. "Self-insurance, self-protection and increased risk aversion," Economics Letters, Elsevier, vol. 17(1-2), pages 39-42.
- Dionne, G. & Eeckhoudt, L., 1984. "Self-Insurance, Self-Protection and Increased Risk Aversion," Cahiers de recherche 8424, Universite de Montreal, Departement de sciences economiques.
- Dhaval Dave & Robert Kaestner, 2009.
"Health insurance and ex ante moral hazard: evidence from Medicare,"
International Journal of Health Care Finance and Economics,
Springer, vol. 9(4), pages 367-390, December.
- Dhaval Dave & Robert Kaestner, 2006. "Health Insurance and Ex Ante Moral Hazard: Evidence from Medicare," NBER Working Papers 12764, National Bureau of Economic Research, Inc.
- Hoel, Michael & Iversen, Tor & Nilssen, Tore & Vislie, Jon, 2006. "Genetic testing in competitive insurance markets with repulsion from chance: A welfare analysis," Journal of Health Economics, Elsevier, vol. 25(5), pages 847-860, September.
- 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.
- Bardey, David & Lesur, Romain, 2005. "Optimal health insurance contract: Is a deductible useful?," Economics Letters, Elsevier, vol. 87(3), pages 313-317, June.
- Tabarrok, Alexander, 1994. "Genetic testing: An economic and contractarian analysis," Journal of Health Economics, Elsevier, vol. 13(1), pages 75-91, March.
- Hoy, Michael, 1989. "The value of screening mechanisms under alternative insurance possibilities," Journal of Public Economics, Elsevier, vol. 39(2), pages 177-206, July.
- Cochrane, John H, 1995. "Time-Consistent Health Insurance," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 445-73, June.
- Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug..
- 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.
- Francesca Barigozzi & Dominique Henriet, 2011.
"Genetic Information: Comparing Alternative Regulatory Approaches When Prevention Matters,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 13(1), pages 23-46, 02.
- F. Barigozzi & D. Henriet, 2009. "Genetic Information: Comparing Alternative Regulatory Approaches when Prevention Matters," Working Papers 657, Dipartimento Scienze Economiche, Universita' di Bologna.
- Francesca Barigozzi & Dominique Henriet, 2008. "Genetic Information: Comparing Alternative Regulatory Approaches when Prevention Matters," CHILD Working Papers wp01_09, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- 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.
- 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.
- Ray REES & Patricia APPS, 2006. "Genetic testing, income distribution and insurance Markets," Annales d'Economie et de Statistique, ENSAE, issue 83-84, pages 353-368.
- Ray Rees & Patricia Apps, 2006. "Genetic testing, income distribution and insurance markets, CHERE Working Paper 2006/3," Working Papers 2006/3, CHERE, University of Technology, Sydney.
- Shavell, Steven, 1979. "On Moral Hazard and Insurance," The Quarterly Journal of Economics, MIT Press, vol. 93(4), pages 541-62, November.
- Hoel, Michael & Iversen, Tor, 2002.
"Genetic testing when there is a mix of compulsory and voluntary health insurance,"
Journal of Health Economics,
Elsevier, vol. 21(2), pages 253-270, March.
- Michael Hoel & Tor Iversen, 2001. "Genetic Testing When There is a Mix of Compulsory and Voluntary Health Insurance," CESifo Working Paper Series 495, CESifo Group Munich.
When requesting a correction, please mention this item's handle: RePEc:tse:wpaper:26029. 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: ()
If references are entirely missing, you can add them using this form.