Subprime Lending
One of the biggest news stories this year is the collapse of the subprime mortgage lending market. Why did this happen? How much do we really know about subprime lending? A working paper by William...
View ArticlePharmaceuticals as an excuse, not treatment
Should doctors prescribe pharmaceuticals to patients who have heart disease. Statins and ACE inhibitors are frequently prescribed to patients with cardiovascular problems. These medications have been...
View ArticleDo higher copayments decrease health care costs?
Merrill Goozner of GoozNews writes the following: The share of health care costs borne by individuals has remained fairly steady over the past several decades, and that is the prime argument behind...
View ArticleMoral Hazard in Action
About two weeks ago, I was driving to work and a rock from below a car in front of me flew of the ground and made a quarter-sized spiderweb on my windshield. ₣@¢כ!!! Fortunately, my insurance company...
View ArticleMass Circumcision and Moral Hazard
In Swaziland, a nationwide campaign is under way to circumcise 160,000 males by the end of this year. Not 160,000 male babies, 160,000 adult males. In a country with less than 1.5 million people,...
View ArticleAdverse Selection in Germany
In Germany, poor and middle class individuals must use public insurance, but well-off Germans can choose between using public and private insurance. “In Germany, about 90% of the population is publicly...
View ArticleThe Impacts of Managed Competition in Netherlands
Financial incentives matter. If one had to give economists (and health economists as well) a slogan, this would be it. In 2006, the Netherlands instituted a form of managed competition. According to...
View ArticleBehavioral Hazard
Moral hazard says that people use too much care when prices are subsidized. Behavioral hazard, on the other hand, says that even when the price of care is subsidized by insurance, patient utilization...
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