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Genetic testing, income distribution and insurance Markets

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  • Ray Rees
  • Patricia Apps

Abstract

In many countries, fears that genetic testing may lead to a "genetic underclass" have led to restrictions on insurance companies' access to genetic information. This paper first shows that such restrictions are Pareto inefficient. The real problem appears to be that in the absence of such restrictions, outcomes on health insurance markets would be very inequitable. This paper analyses income redistribution policies to correct this, when income endowments differ in a way that may or may not be correlated with risk type.

Suggested Citation

  • Ray Rees & Patricia Apps, 2006. "Genetic testing, income distribution and insurance Markets," Annals of Economics and Statistics, GENES, issue 83-84, pages 353-368.
    • Handle: RePEc:adr:anecst:y:2006:i:83-84:p:353-368
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    File URL: http://www.jstor.org/stable/20079174
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    Cited by:

    1. Bardey, David & De Donder, Philippe, 2013. "Genetic testing with primary prevention and moral hazard," Journal of Health Economics, Elsevier, vol. 32(5), pages 768-779.
    2. Francesca Barigozzi & Dominique Henriet, 2011. "Genetic Information: Comparing Alternative Regulatory Approaches When Prevention Matters," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(1), pages 23-46, February.
    3. Filipova-Neumann, Lilia & Hoy, Michael, 2014. "Managing genetic tests, surveillance, and preventive medicine under a public health insurance system," Journal of Health Economics, Elsevier, vol. 34(C), pages 31-41.
    4. Kesternich, Iris & Schumacher, Heiner, 2009. "On the Use of Information in Repeated Insurance Markets," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 280, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    5. Christine Arentz, 2012. "Auswirkungen von Gentests in der Krankenversicherung," Otto-Wolff-Institut Discussion Paper Series 04/2012, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.

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