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Health-Risking Informal Service: Price, Prevalence and Law Enforcement



The health-risking informal service is transacted when the expected extra satisfaction rate exceeds the ratio of the expected extra cost to the formal service price. Its prevalence decreases with the costs of risk bearing for the providers and clients. Law-enforcement effort lowers (raises) the informal service equilibrium price when the ratio of the providers' and the clients' degrees of absolute risk aversion is greater (smaller) than the ratio of the law-enforcement elasticities of their cost bearing. Spending on law enforcement is efficient when the public cost of the expected chain-infection stemming from the informal service exceeds a threshold level.

Suggested Citation

  • Levy, Amnon, 2005. "Health-Risking Informal Service: Price, Prevalence and Law Enforcement," Economics Working Papers wp05-13, School of Economics, University of Wollongong, NSW, Australia.
  • Handle: RePEc:uow:depec1:wp05-13

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    References listed on IDEAS

    1. Levy, Amnon, 2002. "A lifetime portfolio of risky and risk-free sexual behaviour and the prevalence of AIDS," Journal of Health Economics, Elsevier, vol. 21(6), pages 993-1007, November.
    2. Levy, Amnon, 1992. "An Analysis of the Potential Externalities Affecting the Borrowing Behaviour of Developing Countries," Australian Economic Papers, Wiley Blackwell, vol. 31(58), pages 164-176, June.
    3. Levy, Ammon & Justman, Moshe & Hochman, Eithan, 1989. "The implications of financial cooperation in Israel's semi-cooperative villages," Journal of Development Economics, Elsevier, vol. 30(1), pages 25-40, January.
    4. Robert N. Collender & David Zilberman, 1985. "Land Allocation under Uncertainty for Alternative Specifications of Return Distributions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(4), pages 779-786.
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    More about this item


    Unsafe sex service; risk bearing; sexually transmitted diseases; public costs; law enforcement;

    JEL classification:

    • I19 - Health, Education, and Welfare - - Health - - - Other
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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