Data on Healthcare Economics Reported by Marie-Louise Leroux and Colleagues (Long term care insurance with state-dependent preferences): Economics – Healthcare Economics

2021 SEP 24 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- New research on Economics - Healthcare Economics is the subject of a report. According to news originating from Quebec, Canada, by NewsRx correspondents, research stated, “We study the demand for Long Term Care (LTC hereafter) insurance in a setting where agents have state-dependent preferences over both a daily life consumption good and LTC expenditures. We assume that dependency creates a demand for LTC expenditures while decreasing the marginal utility of daily life consumption, for any given consumption level.”

Financial supporters for this research include Fonds de Recherche du Quebec-Societe et Culture, Agence Nationale de la Recherche, Social Sciences and Humanities Research Council of Canada, Social Sciences and Humanities Research Council of Canada.

Our news journalists obtained a quote from the research, “Agents optimize over their consumption of both goods as well as over the amount of LTC insurance (LTCI). We first show that some agents optimally choose not to insure themselves, while no agent wishes to buy complete insurance, in accordance with the so-called LTCI puzzle. At equilibrium, the transfer received from the insurer covers only a fraction of the LTC expenditures. The demand for LTCI need not increase with income when preferences are non state-dependent or insurance is actuarially unfair. Also, preferences have to be state-dependent with no insurance bought to rationalize the empirical observation of a higher marginal utility at equilibrium when autonomous.”

According to the news editors, the research concluded: “Finally, focusing on iso-elastic preferences, we recover the empirical observation that health/LTC expenditures are not very sensitive to income, and we show that LTCI as a fraction of income should decrease with income and then become nil above a threshold.”

This research has been peer-reviewed.

For more information on this research see: Long term care insurance with state-dependent preferences. Health Economics, 2021. Health Economics can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - http://www.wiley.com/; Health Economics - http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1050)

The news correspondents report that additional information may be obtained from Marie-Louise Leroux, Departement des Sciences Economiques, ESG-UQAM, Montreal, Quebec, Canada.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1002/hec.4423. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

The publisher’s contact information for the journal Health Economics is: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA.

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