American Economic Review Vol. 92 No. 1 2002

Insuring Consumption Against Illness

Paul Gertler¹; Jonathan Gruber²

¹ Haas School of Business, University of California, Berkeley, CA 94720, and National Bureau of Economic Research. · ² Department of Economics, E52-355, Massachusetts Institute of Technology, 50 Memorial Drive, Cambridge, MA 02142, and National Bureau of Economic Research.

Abstract

One of the most sizable and least predictable shocks to economic opportunities in developing countries is major illness. We investigate the extent to which families are able to insure consumption against major illness using a unique panel data set from Indonesia that combines excellent measures of health status with consumption information. We find that there are significant economic costs associated with major illness, and that there is very imperfect insurance of consumption over illness episodes. These estimates suggest that public disability insurance or subsidies for medical care may improve welfare by providing consumption insurance.

DOI

10.1257/000282802760015603

Volume

92

Issue

1

Pages

51-70

Language

en

Sources

crossref openalex bibtex:phds-export.bib

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓