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Delay is not the answer: waiting time in health care & income redistribution

  • Amedeo Fossati
  • Rosella Levaggi

In this paper, the use of delay as a tool to improve income redistribution is examined. We assume that people with the highest opportunity cost of waiting address their demand to the private market; if these, as we assume, are the ones at the higher end of the income distribution, they contribute through income tax, and pay for the private care they receive as well. Thus, public and private provision of health care, made mutually consistent within a utility-based approach by the presence of delay, may be used to modify income distribution. Our model modifies the results obtained by the current literature and shows that, when individual utilities are strictly quasi-concave and a cost-minimization framework is replaced by a Bergson-Samuelson welfare function maximisation, delay is no longer welfare improving. The reason is that, even when an optimum delay exists, the correspondent social maximum is a local maximum. The scope for using delay is then confined to environments where the Central Government’s power to tax is not sufficient to raise adequate resources or where, due to tax evasion or high tax distortions, second best tax instruments should be used.

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Paper provided by University of Brescia, Department of Economics in its series Working Papers with number 0801.

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Date of creation: 2008
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Handle: RePEc:ubs:wpaper:0801
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  1. Enrico Minelli & Salvatore Modica, 2006. "Credit Market Failures and Policy," Working Papers ubs0607, University of Brescia, Department of Economics.
  2. Chiara Dalle Nogare & Matilde Vassalli, 2006. "A Pressure-Augmented Taylor Rule for Italy," Working Papers ubs0604, University of Brescia, Department of Economics.
  3. Francoise Forges & Enrico Minelli, 2006. "Afriat’s Theorem for General Budget Sets," CESifo Working Paper Series 1703, CESifo Group Munich.
  4. Geweke, John & Amisano, Gianni, 2007. "Hierarchical Markov normal mixture models with applications to financial asset returns," Working Paper Series 0831, European Central Bank.
  5. Sergio Vergalli, 2006. "Entry and Exit Strategies in Migration Dynamics," Working Papers 2006.123, Fondazione Eni Enrico Mattei.
  6. Rosella Levaggi & Francesco Menoncin, 2007. "A note on optimal tax evasion in the presence of merit goods," Working Papers 0702, University of Brescia, Department of Economics.
  7. Michele Moretto & Paolo M. Panteghini & Carlo Scarpa, 2007. "Profit Sharing and Investment by Regulated Utilities: a Welfare Analysis," "Marco Fanno" Working Papers 0059, Dipartimento di Scienze Economiche "Marco Fanno".
  8. DRÈZE, Jacques & MINELLI, Enrico & TIRELLI, Mario, 2004. "Production and financial policies under asymmetric information," CORE Discussion Papers 2004027, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. Gianni Amisano & Oreste Tristani, 2007. "Euro Area Inflation Persistence in an Estimated Nonlinear DSGE Model," Working Paper Series 18-07, The Rimini Centre for Economic Analysis.
  10. Roberto Casarin & Jean-Michel Marin, 2007. "Online data processing: comparison of Bayesian regularized particle filters," Working Papers 0703, University of Brescia, Department of Economics.
  11. Sergio Vergalli, 2006. "Dynamics in Immigration Community," Working Papers ubs0613, University of Brescia, Department of Economics.
  12. Roberto Casarin & Monica Billio, 2006. "Stochastic Optimisation for Allocation Problems with Shortfall Risk Constraints," Working Papers ubs0618, University of Brescia, Department of Economics.
  13. Francesco Menoncin, 2006. "The role of longevity bonds in optimal portfolios," Working Papers 0601, University of Brescia, Department of Economics.
  14. Paolo Panteghini, 2009. "The capital structure of multinational companies under tax competition," International Tax and Public Finance, Springer, vol. 16(1), pages 59-81, February.
  15. Carmine Trecroci & Matilde Vassalli, 2010. "Monetary Policy Regime Shifts: New Evidence From Time-Varying Interest Rate Rules," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 933-950, October.
  16. Rosella Levaggi, 2006. "Tax evasion and the cost of public sector activities," Working Papers ubs0616, University of Brescia, Department of Economics.
  17. Aviad Heifetz & Enrico Minelli, 2006. "Aspiration Traps," Working Papers ubs0610, University of Brescia, Department of Economics.
  18. Alessandro Bucciol & Raffaele Miniaci, 2006. "Optimal Asset Allocation Based on Utility Maximization in the Presence of Market Frictions," Working Papers ubs0605, University of Brescia, Department of Economics.
  19. Casarin, Roberto & Trecroci, Carmine, 2006. "Business Cycle and Stock Market Volatility: A Particle Filter Approach," Economics Papers from University Paris Dauphine 123456789/6830, Paris Dauphine University.
  20. Federico Boffa & Carlo Scarpa, 2006. "Exporting Collusion Under Capacity Constraints: an Anti-Competitive Effect of Market Integration," Working Papers ubs0617, University of Brescia, Department of Economics.
  21. Franco Spinelli & Carmine Trecroci, 2006. "Maastricht: New and Old Rules," Open Economies Review, Springer, vol. 17(4), pages 477-492, December.
  22. Laura Levaggi & Rosella Levaggi, 2007. "Regulation Strategies for Public Service Provision," Working Papers 0707, University of Brescia, Department of Economics.
  23. Giulio Palermo, 2006. "Il Potere Come Relazione Sociale: il Caso dell'Università Baronale Italiana," Working Papers ubs0612, University of Brescia, Department of Economics.
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