The Political Economy of a Publicly Provided Private Good with Adverse Selection
Given heterogeneity in incomes and health risks, with asymmetric information in the latter, preferences over the public-private mix in health insurance and care are derived. Results concerning crowding-out in the presence of adverse selection are established. For low-risk individuals, crowding-out depends on risk aversion. A set of such individuals prefers a mixed public-private health care system. A majority-voting equilibrium exists. Under weak assumptions about the income distribution and tax function, both public and private sectors exist in the equilibrium. Comparing information regimes, public provision is more likely to be positive, and will not be lower, under asymmetric information. In the presence of asymmetric information, the equilibrium is more complicated than the "ends-against-the-middle" variety derived elsewhere in the literature.
|Date of creation:||Oct 1999|
|Contact details of provider:|| Postal: School of Economics, University of Kent, Canterbury, Kent, CT2 7NP|
Phone: +44 (0)1227 827497
Web page: http://www.kent.ac.uk/economics/
|Order Information:|| Email: |
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.:
- Blomquist, Soren & Christiansen, Vidar, 1999.
"The political economy of publicly provided private goods,"
Journal of Public Economics,
Elsevier, vol. 73(1), pages 31-54, July.
- Blomquist, Sören & Christiansen, Vidar, 1998. "The Political Economy of Publicly Provided Private Goods," Working Paper Series 1998:14, Uppsala University, Department of Economics.
- Blomquist, S. & Christiansen, V., 1998. "The Political Economy of Publicly Provided Private Goods," Papers 1998-14, Uppsala - Working Paper Series.
- B. Dahlby, 1981. "Adverse selection and Pareto improvements through compulsory insurance," Public Choice, Springer, vol. 37(3), pages 547-558, January.
- Usher, Dan, 1977. "The welfare economics of the socialization of commodities," Journal of Public Economics, Elsevier, vol. 8(2), pages 151-168, October.
- Dan Usher, 1976. "The Welfare Economics of the Socialization of Commodities," Working Papers 218, Queen's University, Department of Economics.
- Stiglitz, J. E., 1974. "The demand for education in public and private school systems," Journal of Public Economics, Elsevier, vol. 3(4), pages 349-385, November.
- Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
- Robert Spann, 1974. "Collective consumption of private goods," Public Choice, Springer, vol. 20(1), pages 63-81, December.
- Wilson, L. S. & Katz, Michael L., 1983. "The socialization of commodities," Journal of Public Economics, Elsevier, vol. 20(3), pages 347-356, April.
- Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November.
- Wilson, Charles, 1977. "A model of insurance markets with incomplete information," Journal of Economic Theory, Elsevier, vol. 16(2), pages 167-207, December.
- Spence, Michael, 1978. "Product differentiation and performance in insurance markets," Journal of Public Economics, Elsevier, vol. 10(3), pages 427-447, December.
- Miguel Gouveia, 1997. "Majority rule and the public provision of a private good," Public Choice, Springer, vol. 93(3), pages 221-244, December.
- Gouveia, Miguel, 1997. "Majority Rule and the Public Provision of a Private Good," Public Choice, Springer, vol. 93(3-4), pages 221-244, December.
- James Buchanan, 1970. "Notes for an Economic theory of socialism," Public Choice, Springer, vol. 8(1), pages 29-43, March.
- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
- N/A, 1970. "Note," Review of Radical Political Economics, Union for Radical Political Economics, vol. 2(4), pages 1-1, October. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ukc:ukcedp:9911. 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: (Tracey Girling)
If references are entirely missing, you can add them using this form.