Modelling dynamic choice: Private health insurance in Australia, CHERE Research Report 24
This study investigates the role of dynamic, discrete choice modelling in the context of private hospital insurance in Australia. This is achieved with the use of a unique panel data set of young Australian women ? The Australian Longitudinal Study on Women?s Health (or ALSWH). Very few (if any) private health insurance studies in Australia have used panel data due to the limited availability of longitudinal data sets. Yet panel data allows two important innovations ? it allows a researcher to control for unobserved heterogeneity across individuals and facilitates dynamic modelling that would otherwise require long time series data. Both these innovations are a feature of the dynamic, random effects probit model I propose here. Using the ALSWH data set I find that the choice to purchase private hospital insurance is strongly determined by income, access to hospitals and inertia in choice. I also find family formation, pregnancy, education, exercise levels and country of birth to be significant drivers of choice. Interestingly, I find little evidence of adverse selection in this sample of young women, as those more likely to be insured have higher self-reported health and few chronic conditions. Overall, I find the dynamic specification with state dependence effects provides an important insight into consumer behaviour, with young women exhibiting statistically and economically large amounts of inertia in choice. Women who were in cover in 1996 or 2000 were more likely to be covered in 2003. Conversely, women without cover were unlikely to move into cover despite a wide range of Australian Government incentives. As policy makers consider the future of private health care, researchers must consider dynamic studies as way to fully gauge consumer behaviour.
Family formation and the demand for health insurance.
We study how demand for health insurance responds to family formation using a unique panel of young Australian women. Our data allow us to simultaneously control for the influence of state dependence and unobserved heterogeneity and detailed information on children and child aspirations. We find evidence that women purchase insurance in preparation for pregnancy but then transition out of insurance once they have finished family building. Children have a large, negative impact on demand for insurance, although this effect is smaller for those on higher incomes. We also find that state dependence has a large impact on insurance demand. Our results are robust to a variety of alternative modelling strategies.
The Problem of Disagreement in Legal Ethics Theory
Legal ethics theories give competing and exclusive accounts of the ethical foundations of the lawyer’s role. They disagree about the relationship between morality and law, about the content of the lawyer’s central ethical duties and about how specific ethical problems should be resolved. Each theoretical account asserts that the others are mistaken in some fundamental way. Yet all legal ethics theories are theories of action; legal ethics theorists do not seek merely to enlighten, they also seek to influence how lawyers and the legal profession respond to ethical issues. This creates a problem of disagreement: the problem created by the divergent but exclusive claims made by different ethical theories at the point when those theories are to be translated into action. This paper considers how, given the problem of disagreement, legal ethics theories can have any impact on individual ethical decision-making or public policy. Specifically, it considers how theories can have any impact given a) that they fundamentally disagree; and b) what experimental psychology tells us about how people make ethical decisions in fact, and the nature of lawyer regulation.