Risk, health production and private medical insurance in the UK -PhD Thesis-

Abstract

This thesis focuses on issues related to Private Medical Insurance, health consumption choices, risk behaviour, and on-market support mechanisms such as social capital, in the UK. Analysis of the British Household Panel Survey from 1996 - 2002 is undertaken with the aim of developing and testing a range of hypotheses linked to health risk mediation for households.
There are three main strands which are empirically tested using an appropriate range of regression frameworks.
Firstly, factors which influence the demand and supply for PMI are examined within a two-stage bootstrapped probit model, incorporating consideration of the potential endogeneity of income.
Secondly, theoretical mechanisms which households and individuals might use to mediate risks in a non-market setting are modelled and empirically tested. This section examines whether individuals purchase differing bundles of PMI depending on their personal endowment of non-market risk protection in the form of social capital. This section also tests the suitability of variables in the BHPS to evaluate the desire for risk reduction and wish to be financially and physically independent in the context of PMI allows people to produce health more efficiently.
Thirdly, the contribution of PMI to general and health utility is examined and quantified in a ‘happiness model’ within an ordinal logistic regression model.