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The great health challenge: levelling up the U.K.
Abstract
Around the world, there are persistent and growing health inequalities both between and within countries. The U.K. Government’s flagship policy for addressing inequalities is called ‘Levelling Up’. One of its missions is to narrow the gap in healthy life expectancy (HLE) between the healthiest and unhealthiest areas in England and to improve overall HLE by 5 years by 2035. We show that smoking is one of the major causes of health inequalities. We find a 17-year difference in HLE between local authorities, and that the number of years spent in ill health tended to be greatest in areas with the highest mortality from smoking-related disease. Our aim is to see if the 5-year target could be achieved, assuming there were drastic controls on the sale and consumption of tobacco. We show that never smokers enjoy six more years of good health at age 20 than current or ex-smokers. A complete ban on smoking would lead to a 2.5-year improvement in HLE, and also lengthen the working lives of both men and women. We conclude that while a complete tobacco ban is significant, other public health measures are needed for the full achievement of the target. The paper briefly considers wider issues and suggestions for further research and its international significance.
The effect of microinsurance on the financial resilience of low-income households in Ghana: evidence from a propensity score matching analysis
Abstract
Microinsurance has emerged as a potential way to fortify the financial resilience of low-income households by providing a safety net against economic uncertainty and promoting financial inclusion for the poor. In light of the current economic downturn in Ghana, several institutions have advocated for the implementation of microinsurance programmes to support the financial stability of low-income households in the informal sector. This study assesses the impact of microinsurance on the financial resilience of the poor in Ghana, proxied by income and precautionary savings. The study analyses data on 1453 households from three regions using propensity score matching, Tobit and Probit instrumental variable techniques. The study finds that microinsurance adoption improves the financial resilience of the poor and reduces dependence on precautionary savings, a self-insurance strategy which significantly increases the financial burden on households, thereby exacerbating the impact of shocks.
Microinsurance in Ghana: investigating the impact of Outreville's four-factor framework and firm and product characteristics on adoption
Abstract
Microinsurance is a risk management tool for low-income households. However, its adoption is low in Ghana. This study examines the determinants of microinsurance adoption in Ghana, analysing primary data from 1453 households across six key markets and three regions. We also gathered secondary data from 14 microinsurance firms and 47 microinsurance products between 2017 and 2021. We estimate the critical factors influencing microinsurance uptake using robust probit, fixed-effects and panel-corrected standard error models. Our findings indicate that income levels, trust in financial institutions and participation in community risk management groups and the national health insurance scheme are the key determinants affecting microinsurance adoption. Firm- and product-specific factors such as affordability, outstanding claims, risk premiums and benefits paid to microinsurance participants also influence adoption. This study also highlights the crucial role of structural, social and economic factors in predicting demand for microinsurance, utilising Outreville's four-factor insurance demand framework.
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Risk preferences and risk perceptions in insurance experiments: some methodological challenges
Abstract
The ability to run experiments, or to see natural data as a quasi-experiment, does not free one from the need for theory when evaluating insurance behavior. Theory can be used to motivate the experimental design, evaluate latent effects from the experiment, or test hypotheses about latent effects or about observable effects that could be confounded by latent effects. The risk, evident in the broader behavioral literature in general, is the attention given to “behavioral story-telling” in lieu of rigorous scholarship. Such story-telling certainly has a role in fueling speculation about possible casual forces at work generating the data we see, but should not be mistaken for the final word. There is also a severe cost in terms of the heroic assumptions needed for identification. Again, such identifying assumptions can have a valuable role, but many general claims rely critically on those assumptions. Controlled laboratory experiments and Bayesian econometric methods should play a complementary role to field experiments and quasi-experiments. One clear lesson from the evaluation of methodological challenges is to use theory more, to explore the ability of “standard economics” to explain behavior. The time has long passed where straw men theories are set up to fail when confronted with behavior. Just as we want to consider flexible parametric functional forms when appropriate, we should be open to conventional economics applied more flexibly.
Evaluating sustainability actions under uncertainty: the role of improbable extreme scenarios
Abstract
An optimality condition for sustainability actions under discounted expected utility is that, ex post, we should almost surely regret having adjusted them too much for risk. In other words, ex post, one would almost surely feel regret for "excess" precautionary saving, excess insurance and hedging coverage, or for excess risk-bearing. Moreover, for marginal investments whose impacts materialize in t years, t tending to infinity, their state-contingent present value tends to zero almost surely, in spite of the fact that their expected value is one. The value of sustainable actions is thus mostly derived from very improbable extreme scenarios.
Welfare analysis in insurance markets
Abstract
“Efficiency” in economics can be employed in two distinct ways: as a statement about the class of policies that all policy advisors would agree to, regardless of their views about distributional preferences; or as something valuable that policy advisors potentially need to trade-off against equity goals. This distinction can be safely put to the side in some settings, for instance when information is symmetric, individuals have linear-in-consumption preferences, and the planner can implement person-specific taxes and transfers. In asymmetric information settings like insurance markets, it cannot. The efficiency notion employed by Einav and Finkelstein (J Econ Perspect 25(1):115–138, 2011) for studying competitive insurance markets (EF-efficiency) can therefore only be understood in the second way, and policy recommendations based on EF-efficiency alone thus amount to a tacit expression of indifference to distributional concerns.