Catastrophic Medical Expenditure Risk

42 Pages Posted: 1 May 2013

See all articles by Gabriela Flores

Gabriela Flores

University of Lausanne

Owen A. O'Donnell

University of Macedonia

Multiple version iconThere are 3 versions of this paper

Date Written: April 30, 2013

Abstract

Medical expenditure risk can pose a major threat to living standards. We derive decomposable measures of catastrophic medical expenditure risk from reference-dependent utility with loss aversion. We propose a quantile regression based method of estimating risk exposure from cross-section data containing information on the means of financing health payments. We estimate medical expenditure risk in seven Asian countries and find it is highest in Laos and China, and is lowest in Malaysia. Exposure to risk is generally higher for households that have less recourse to self-insurance, lower incomes, wealth and education, and suffer from chronic illness.

Keywords: medical expenditures, catastrophic payments, downside risk, reference-dependent utility, Asia

JEL Classification: D120, D310, D800, I130, I150

Suggested Citation

Flores, Gabriela and O'Donnell, Owen A., Catastrophic Medical Expenditure Risk (April 30, 2013). CESifo Working Paper Series No. 4198, Available at SSRN: https://ssrn.com/abstract=2258315 or http://dx.doi.org/10.2139/ssrn.2258315

Gabriela Flores

University of Lausanne ( email )

Quartier Chambronne
Lausanne, Vaud CH-1015
Switzerland

Owen A. O'Donnell (Contact Author)

University of Macedonia ( email )

156 Egnatia St.
P.O. 1591
Thessaloniki, 54006
Greece

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