Alternative models of choice under uncertainty and demand for health insurance

Article Abstract:

A standard expected utility model and alternative models of how people evaluate risky prospects are tested using data on health insurance plan preferences. A fit better than that of the standard utility model was yielded from a model that assumes that individuals evaluate gains and losses relative to a reference rather than final outcomes, process certain and uncertain outcomes separately and treat gains and losses asymmetrically. Results suggest inertia in health insurance plan choice. In addition, individuals are assumed to be more responsive to decreases than to increases in insurance prices.

Models, Analysis, Health insurance, Public opinion, Uncertainty, Utility theory, Utility functions

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A household-based, nonparametric test of demand theory

Article Abstract:

The microeconomic behavior of households was studied through nonparametric tests of data from the Consumer Expenditure Survey from 1982-1985. The advantage of nonparametric tests are they are able to assess optimizing behavior through analyses of price-consumption data that go against the Generalized Axiom of Revealed Preference. It was suggested that consumption patterns and budget constraints are in general agreement with theories on optimizing behavior and consumer preferences.

Economic aspects, Households, Nonparametric statistics

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The theory and measurement of producer response under quotas

Article Abstract:

An analysis describing demand theory applications under rationing is presented. The analysis applies duality theory in examining the case of producer behavior given production quotas. The study allows the measurement of unobservable market supply and demand variables. It is shown that theoretical utilization generates a supply elasticity of tobacco of 7.0 under absent quota conditions.

Production (Economics), Duality theory (Mathematics)

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