Price elasticity and adverse selection in the demand for supplementary health insurance.

@article{Marquis1987PriceEA,
  title={Price elasticity and adverse selection in the demand for supplementary health insurance.},
  author={M. Susan Marquis and Charles E. Phelps},
  journal={Economic inquiry},
  year={1987},
  volume={25 2},
  pages={299-313}
}
Probit regression estimates show the effects of the price of insurance, anticipated medical expenditures, and other factors on reported decisions about purchasing hypothetically offered supplementary insurance policies. The demand estimates can characterize how much supplemental insurance would be purchased under different tax policies affecting health insurance purchases. Although eliminating the current tax subsidy to insurance is shown to decrease demand, the results indicate a substantial… CONTINUE READING

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