• UCL Twitter account
  • UCL YouTube channel
  • UCL Facebook page
  • UCL SoundCloud channel
  • UCL iTunes store

Information for Staff

Calendar

Select dates to view past and future events

12:30 - 13:40 2 May 2012

Moral hazard in health insurance: how important is forward looking behavior? (joint with Aviva Aron-Dine, Liran Einav, and Mark Cullen)

Location

IFS Conference Room | Institute for Fiscal Studies (link Map)
7 Ridgmount Street | London | WC1E 7AE |

Open to: Academic | Student
Ticketing: Open

Speaker information

Amy Finkelstein, Massachusetts Institute of Technology

We investigate whether individuals exhibit forward looking behavior in their response to the non-linear pricing common in health insurance contracts. Our empirical strategy exploits the fact that employees who join an employer-provided health insurance plan later in the calendar year face the same initial (spot) price of medical care but a higher expected end-of-year (future) price than employees who join the same plan earlier in the year. Our results reject the null of completely myopic behavior; medical utilization appears to respond to the future price, with a statistically signi…cant elasticity of medical utilization with respect to the future price of -0.4 to -0.6. To try to quantify the extent of forward looking behavior, we develop a stylized dynamic model of individual behavior and calibrate it using our estimated behavioral response and additional data from the RAND Health Insurance Experiment.


Contact

Institute for Fiscal Studies
020 7291 4800 |


image