Private Medical Insurance and Saving: Evidence from the British Household Panel Survey

36 Pages Posted: 20 Nov 2002

See all articles by Alessandra Guariglia

Alessandra Guariglia

University of Kent, Canterbury

Mariacristina Rossi

University of Turin, Esomas

Date Written: October 2003

Abstract

This paper uses the British Household Panel Survey for the years 1996 to 2000 to investigate whether individuals in the UK save for precautionary motives against uncertain medical costs. In particular, we test the hypothesis that those individuals who are not covered by private medical insurance, and who are therefore more exposed to facing unexpected health care expenditures or loss of income while waiting for treatment, tend to save more than those who are covered. According to our findings, which are based on a wide range of econometric specifications, there is a positive association between insurance coverage and saving, suggesting that private medical insurance does not crowd out private saving. This relationship is however weaker in areas where people feel the quality of medical facilities to be poor and in rural areas.

Keywords: precautionary saving, private medical insurance

JEL Classification: D12, D91, E21, H51

Suggested Citation

Guariglia, Alessandra and Rossi, Mariacristina, Private Medical Insurance and Saving: Evidence from the British Household Panel Survey (October 2003). CEIS Tor Vergata - Research Paper Series No. 39. Available at SSRN: https://ssrn.com/abstract=320881 or http://dx.doi.org/10.2139/ssrn.320881

Alessandra Guariglia (Contact Author)

University of Kent, Canterbury ( email )

Canterbury, Kent CT2 7NZ
United Kingdom
01227 827412 (Phone)
01227 827850 (Fax)

Mariacristina Rossi

University of Turin, Esomas ( email )

Corso Unione Sovietica
Torino, Torino 10100
Italy

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