Eliciting Information on Household's Perceived Value of Health Insurance

Matthew Shapiro and Miles Kimball, University of Michigan

There are a number of reasons why households might value health insurance at less than the cost to a firm of providing that insurance. We propose to measure how much people value health insurance as a component of job choices. Using the hypothetical scenario approach of the Survey Research Center at the University of Michigan, we have already begun to study household attitudes toward job choices by asking people in the Survey of Consumers whether they would quit their job or start a job after winning a sweepstakes or in the face of an increase in the wage of a job. By varying the questions about the job reaction to winning a sweepstakes according to whether this will cause the loss of health insurance or not, the effect of health insurance on job decisions can be elicited. In particular, the elasticity of job choice with respect to its health insurance effect can be compared to the elasticity of job choice with respect to a job's wage.