Moral Hazard Heterogeneity: Genes and Health Insurance Influence Smoking after a Health Shock

Arbeitspapier

Decision-making in the realm of health behaviors, such as smoking or drinking, is influenced both by biological factors, such as genetic predispositions, as well as environmental factors, such as financial liquidity and health insurance status. We show how the choice of smoking after a cardio-vascular health shock is jointly determined by the interplay between these biological and environmental constraints. Individuals who suffer a health shock when uninsured are 25.6 percentage points more likely to reduce smoking, but this is true only for those who have a low index of genetic predisposition to smoking. Individuals with a low index of genetic predisposition are more strategic and flexible in their behavioral response to an external shock. This differential elasticity of response depending on your genetic variants is evidence of individual-level heterogeneity in moral hazard. These results suggest that genetic heterogeneity is a factor that should be considered when evaluating the effectiveness and fairness of health insurance policies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 14176

Classification and Topics

• Classification: Wirtschaft ; Health Behavior ; Health Insurance, Public and Private ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
• Subject: moral hazard ; genetics ; smoking ; medicare

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Biroli, Pietro ; Zwyssig, Laura
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/236207
• Last update: 10.03.2025, 11:42 AM CET