Does Gender Affect Risk Aversion & Moral Hazard in Healthcare Behavior?

Agricultural and Resource Economics Professors Tom Vukina and Xiaoyong Zheng collaborated with Yan Zheng of JP Morgan & Chase Company to assess the way the idea of a moral hazard (lack of incentive to guard against risk where one is protected from its consequences, e.g. by insurance) affects healthcare choices made by men and women.

Americans spent 3.5 trillion dollars on health insurance in 2017 and the amount is growing yearly. Understanding consumer behavior is an important area of research in a time when national attention is being focused on the healthcare industry. The research showed no statistically significant difference in moral hazard between men and women which reflects the literature on gender differences in risk aversion.


This paper uses truncated count model with endogeneity and simulated maximum likelihood estimation technique to estimate gender differences in moral hazard in health care insurance. We use the dataset that consists of invoices for all outpatient services from a regional hospital in Croatia. Our theoretical model predicts that higher risk aversion is associated with smaller ex-post moral hazard effect. If women are more risk averse than men, then the moral hazard effect due to health insurance should be lower in women than in men. After adjusting for the sample selection in the estimation, we found a statistically significant evidence of moral hazard for the general population but statistically insignificant difference in moral hazard between men and women.

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