The Impact of Positive Income Effect on Health Insurance: Evidence from Switzerland
Type
conference paper
Date Issued
2026-08-04
Author(s)
Abstract
Plan-choice elasticities are central to welfare analysis in insurance markets, yet standard estimates treat observed demand responses as pure substitution effects. We exploit a 2019 Swiss reform that cut base premiums for young adults by 15% without changing the regulated price gap between plan options—a pure income shock. Young adults upgrade to lower deductibles with little change in utilization; active decision-makers respond 3.6 times more strongly than the inertial population. Using these estimates to decompose nominal elasticities from a separate subsidy setting, we find income accounts for 11–14% of the demand response.
HSG Classification
contribution to scientific community
Refereed
No
Event Title
American Risk and Insurance Conference 2026 (ARIA)
Event Location
Orlando, USA
Event Date
August 2- August 5, 2026
Subject(s)
Division(s)
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Name
The_Impact_of_Positive_Income_Effect_on_Health_Insurance__Evidence_from_Switzerland.pdf
Size
509.76 KB
Format
Adobe PDF
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