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Social Interaction and the Health Insurance Choices of the Elderly

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Abstract

Using data from the 1998 wave of the Health and Retirement Study, we examine the effect of social interactions on the health insurance choices of the elderly. We find that having more social interactions, as measured by contacts with friends and neighbors, reduces the likelihood of enrolling in a Medicare managed care plan relative to purchasing a medigap policy or having coverage through Medicare alone. Our estimates indicate that social networks are an important determinant of the health insurance choices of the elderly and provide suggestive evidence that "word-of-mouth" information sharing may have played a role in the preference of some seniors for traditional indemnity insurance over managed care.

Suggested Citation

  • Eldar Beiseitov & Jeffrey D. Kubik & John R. Moran, 2004. "Social Interaction and the Health Insurance Choices of the Elderly," Center for Policy Research Working Papers 58, Center for Policy Research, Maxwell School, Syracuse University.
  • Handle: RePEc:max:cprwps:58
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    File URL: https://surface.syr.edu/cpr/105/
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    1. Robert B. Barsky & Miles S. Kimball & F. Thomas Juster & Matthew D. Shapiro, 1995. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Survey," NBER Working Papers 5213, National Bureau of Economic Research, Inc.
    2. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
    3. Crocker, Keith J. & Snow, Arthur, 1985. "The efficiency of competitive equilibria in insurance markets with asymmetric information," Journal of Public Economics, Elsevier, vol. 26(2), pages 207-219, March.
    4. Crocker, Keith J & Snow, Arthur, 1986. "The Efficiency Effects of Categorical Discrimination in the Insurance Industry," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 321-344, April.
    5. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 537-579.
    6. Harrison Hong & Jeffrey D. Kubik & Jeremy C. Stein, 2001. "Social Interaction and Stock-Market Participation," NBER Working Papers 8358, National Bureau of Economic Research, Inc.
    7. Duflo, Esther & Saez, Emmanuel, 2002. "Participation and investment decisions in a retirement plan: the influence of colleagues' choices," Journal of Public Economics, Elsevier, vol. 85(1), pages 121-148, July.
    8. repec:bla:jfinan:v:59:y:2004:i:1:p:137-163 is not listed on IDEAS
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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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