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The Socioeconomic Distribution of Choice Quality: Evidence from Health Insurance in the Netherlands

Author

Listed:
  • Benjamin Handel
  • Jonathan Kolstad
  • Thomas Minten
  • Johannes Spinnewijn

Abstract

We study how choice quality relates to socioeconomic factors, using population-wide data on health insurance choices and utilization in the Netherlands. We document a striking choice quality gradient with respect to socioeconomic status, finding that those with higher income, higher education, and training in quantitative fields make meaningfully better choices. Household income for the top 5 percent of decision-makers, in terms of surplus captured, is almost three times higher than for the bottom 5 percent. When jointly including all factors, education degree and field of study are more important predictors of choice quality than income and other financial variables.

Suggested Citation

  • Benjamin Handel & Jonathan Kolstad & Thomas Minten & Johannes Spinnewijn, 2024. "The Socioeconomic Distribution of Choice Quality: Evidence from Health Insurance in the Netherlands," American Economic Review: Insights, American Economic Association, vol. 6(3), pages 395-412, September.
    • Handle: RePEc:aea:aerins:v:6:y:2024:i:3:p:395-412
    DOI: 10.1257/aeri.20230314
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G52 - Financial Economics - - Household Finance - - - Insurance
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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