BUCHHOLZ, W and WIEGARD, W (1992) INSURANCE AGAINST NURSING RISK - SOME EFFICIENCY CONSIDERATIONS. JAHRBUCHER FUR NATIONALOKONOMIE UND STATISTIK, 209 (5-6). pp. 441-457. ISSN 0021-4027,
Full text not available from this repository.Abstract
In the F.R.G. there is an intensive discussion about introducing compulsory insurance against nursing risk. Until now, no theoretically convincing reason has been given why public intervention is required from an efficiency point of view. Traditional market failure considerations (moral hazard, adverse selection) do not provide any such reason. Our main point is that it is the public assistance system which causes allocative distortions in the covering of nursing risk. Using kinked expected utility curves, introduced by Sinn, we first show how the existence of public assistance influences individual incentives to purchase private insurance against nursing risk. We then prove that this results in an inefficient risk allocation without any further state intervention. The introduction of a compulsory insurance scheme could indeed eliminate any misallocation of risks.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | ; |
| Depositing User: | Dr. Gernot Deinzer |
| Last Modified: | 19 Oct 2022 08:44 |
| URI: | https://pred.uni-regensburg.de/id/eprint/54553 |
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