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Chapter 4 Individual Time Preferences and Health Behaviors, with an Application to Health Insurance

In: Current Issues in Health Economics

Author

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  • W. David Bradford
  • James F. Burgess

Abstract

One of the fundamental tasks in optimal insurance design is mitigating the moral hazard effects inherent in insurance mechanisms. Empirically, relatively little is known about how individual-level time preferences affect selection of insurance options. We use several waves of the Health and Retirement Survey to explore the relationship between revealed time preferences at the individual level and the selection of insurance options for both the under-age-65 population and the Medicare-eligible population. Our results suggest that time preferences are not likely to be fixed across the life cycle, and that they appear to be important predictors of health insurance decisions.

Suggested Citation

  • W. David Bradford & James F. Burgess, 2010. "Chapter 4 Individual Time Preferences and Health Behaviors, with an Application to Health Insurance," Contributions to Economic Analysis, in: Current Issues in Health Economics, pages 63-93, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:ceazzz:s0573-8555(2010)0000290007
    DOI: 10.1108/S0573-8555(2010)0000290007
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