Premium
IS THERE A ‘SECESSION OF THE WEALTHY’? PRIVATE HEALTH INSURANCE UPTAKE AND NATIONAL HEALTH SYSTEM SUPPORT
Author(s) -
CostaFont Joan,
JofreBonet Mireia
Publication year - 2008
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.2008.00285.x
Subject(s) - multivariate probit model , simultaneity , incentive , secession , economics , probit model , probit , health insurance , national health insurance , ordered probit , empirical research , public economics , actuarial science , demographic economics , econometrics , health care , political science , economic growth , microeconomics , environmental health , statistics , medicine , population , physics , mathematics , classical mechanics , politics , law
The purchase of private health insurance (PHI) as a means to partially supplement the National Health System (NHS) coverage is often regarded as a potential signal for a declining support for the NHS. Exploiting the fact that PHI is typically purchased by the most affluent, in this paper we test the so called ‘secession of the wealthy’ hypothesis whereby the likelihood of expressing ‘lack of support for the NHS’ increases with having supplementary PHI. Using empirical data from Catalonia, we draw upon an empirical strategy that circumvents an obvious simultaneity problem by estimating both a recursive bivariate probit as well as an IV probit. After controlling for insurance premium, household income and other socio‐demographic determinants, we find that the purchase of PHI reduces the propensity of individuals to support the NHS. We also find evidence that PHI is a luxury good and sensitive to fiscal incentives.