The Role of Consumer Knowledge of Insurance Benefits in the Demand for Preventative Health

32 Pages Posted: 19 Aug 2003 Last revised: 4 Nov 2010

See all articles by Stephen L. Parente

Stephen L. Parente

University of Illinois at Urbana-Champaign - Department of Economics

David S. Salkever

UMBC, Department of Public Policy

Joan DaVanzo

The Lewin Group

Date Written: August 2003

Abstract

In 1992, the United States Centers for Medicare and Medicaid Services (CMS) introduced new insurance coverage for two preventive services influenza vaccinations and mammograms. Economists typically assume transactions occur with perfect information and foresight. As a test of the value of information, we estimate the effect of consumer knowledge of these benefits on their demand. Treating knowledge as endogenous in a two-part model of demand, we find that consumer knowledge has a substantial positive effect on the use of preventive services. Our findings suggest that strategies to educate the insured Medicare population about coverage of preventive services may have substantial social value.

Suggested Citation

Parente, Stephen L. and Salkever, David S. and DaVanzo, Joan, The Role of Consumer Knowledge of Insurance Benefits in the Demand for Preventative Health (August 2003). NBER Working Paper No. w9912. Available at SSRN: https://ssrn.com/abstract=435502

Stephen L. Parente (Contact Author)

University of Illinois at Urbana-Champaign - Department of Economics ( email )

410 David Kinley Hall
1407 W. Gregory
Urbana, IL 61801
United States

David S. Salkever

UMBC, Department of Public Policy ( email )

1000 Hilltop Circle
Baltimore, MD 21250

Joan DaVanzo

The Lewin Group ( email )

3130 Fariview Park Drive
Suite 800
Falls Church, VA 22042
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
44
Abstract Views
980
PlumX Metrics