Willingness-to-pay for parallel private health insurance: evidence from a laboratory experiment
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Debate over the effects of public versus private health care
finance persists in both academic and policy circles. This paper
presents the results of a revealed preference laboratory experiment
that tests how characteristics of the public health system affect a
subject's willingness-to-pay (WTP) for parallel private health
insurance. Consistent with the theoretical predictions of Cuff et al.
(2010), subjects' average WTP is lower and the size of the private
insurance sector smaller when the public system allocates health care
based on need rather than randomly and when the probability of
receiving health care from the public system is high.
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