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Do you have to win it to fix it? A longitudinal study of lottery winners and their health care demand
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Cheng, Terence C., Costa-i-Font, Joan and Powdthavee, Nick (2018) Do you have to win it to fix it? A longitudinal study of lottery winners and their health care demand. American Journal of Health Economics, 4 (1). pp. 26-50. doi:10.1162/ajhe_a_00092 ISSN 0034-6535.
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Official URL: http://doi.org/10.1162/ajhe_a_00092
Abstract
We exploit lottery wins to investigate the effects of exogenous changes to individuals’ income on the utilization of health care services, and the choice between private and public health care in the United Kingdom. Our empirical strategy focuses on lottery winners in an individual fixed effects framework and hence the variation of winnings arises from within-individual differences in small versus large winnings. The results indicate that lottery winners with larger wins are more likely to choose private health services than public health services from the National Health Service. The positive effect of wins on the choice of private care is driven largely by winners with medium to large winnings (win category > £500 (or US$750); mean = £1922.5 (US$2,893.5), median = £1058.2 (US$1592.7)). There is some evidence that the effect of winnings vary by whether individuals have private health insurance. We also find weak evidence that large winners are more likely to take up private medical insurance. Large winners are also more likely to drop private insurance coverage between approximately 9 and 10 months earlier than smaller winners, possibly after their winnings have been exhausted. Our estimates for the lottery income elasticities for public health care (relative to no care) are very small and are not statistically distinguishable from zero; those of private health care range from 0 – 0.26 for most of the health services considered, and 0.82 for cervical smear.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HG Finance R Medicine > RA Public aspects of medicine |
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Divisions: | Faculty of Social Sciences > Warwick Business School > Behavioural Science Faculty of Social Sciences > Warwick Business School |
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Library of Congress Subject Headings (LCSH): | Lottery winners, Medical care, Lottery winners--Medical care, Elasticity (Economics), Demand (Economic theory), Cost and standard of living, Medical economics , Purchasing power | ||||||||
Journal or Publication Title: | American Journal of Health Economics | ||||||||
Publisher: | M I T Press | ||||||||
ISSN: | 0034-6535 | ||||||||
Official Date: | 2018 | ||||||||
Dates: |
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Volume: | 4 | ||||||||
Number: | 1 | ||||||||
Page Range: | pp. 26-50 | ||||||||
DOI: | 10.1162/ajhe_a_00092 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 7 October 2016 | ||||||||
Date of first compliant Open Access: | 22 August 2018 |
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