“Incomplete Insurance against Health Shocks”. Ana Sofía Leon Lince’s lecture

Friday, 16 November, 2012 | CALENDAR, EVENTS

Tuesday, 13 de November, 2012

Ana Sofía Leon Lince is a PhD Candidate from the Harris School of Public Policy Studies.  Her areas of focus include health policy and program evaluation methods.  She holds a master in public policy from the Harris School of Public Policy Studies and a degree in Economics and Political Science from the Instituto Tecnológico Autónomo de México. Her dissertation studies the effect of health shocks on households economy and the welfare implications of incomplete insurance in developing countries.

the researcher will present the paper  “Incomplete Insurance against Health Shocks: Consumption Costs and Welfare Implications for Developing Countries” to CICS group.

Abstract: Using Mexican longitudinal data, I study the effect of breadwinners’ health shocks on household consumption, measuring health shocks through changes in the capacity to perform Activities of Daily Living (ADLs). I find that health shocks to uninsured households’ breadwinners are associated with significant long- lasting decreases in non-medical per capita consumption, but health shocks to other household members have no such effects. I also find that social security coverage attenuates most of the effects of breadwinners’ health shocks on household consumption, which I interpret as resulting from the fact that social security not only provides medical expenditure coverage but also disability insurance. Therefore, providing full social health insurance to the previously uninsured sector of the population could potentially benefit uninsured households’ economies because of its consumption smoothing properties, although it would not necessarily provide them full consumption insurance against health shocks. To illustrate this, I estimate the marginal per peso welfare gains associated with full insurance against health shocks. I complement these calculations by using a standardized expected utility model to compute the risk premia households would be willing to pay to reduce households’ risk exposure to health shocks.

Link: http://harrisschool.uchicago.edu/directory/phd-students/ana_leon-lince