Princeton University Library Catalog
- Han, Jisoo [Browse]
- Senior thesis
- Bhatt, Swati [Browse]
- Princeton University. Department of Economics [Browse]
- Class year:
- 65 pages
- Summary note:
- The United States devotes a significant portion of its GDP on health care. Even
with this high level of spending, more than 15 percent of Americans remain uninsured.
While many studies have focused on the relationship between demographic
characteristics and insurance, relatively less research has examined insurance in the
framework of consumer choice. I employ nationally representative household-level data
to analyze the impact of insurance on consumption of non-medical goods and services.
Based on OLS regressions, I find that having coverage increases expenditure in various
categories of non-medical expenses, and that this effect is greater for luxuries than
necessities. Additionally, regressions of relative expenditure show that insurance causes
households to spend a smaller portion of their budget on saving and non-medical
The main finding of this paper is that health insurance has a statistically
significant effect on various categories of non-medical consumption. Thus, public health
policy should consider the effect of coverage not only on utilization of medical care but
also on other types of expenditure. As coverage is expanded through the Affordable
Care Act, it will become important to study the full impact of the reform by analyzing
household behavior in a broader sense.