RT Journal Article
SR Electronic
T1 Policy Choice and Product Bundling in a Complicated Health Insurance Market
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 566
OP 610
DO 10.3368/jhr.55.2.0417-8689R1
VO 55
IS 2
A1 Kettlewell, Nathan
YR 2020
UL http://jhr.uwpress.org/content/55/2/566.abstract
AB Understanding how consumers choose health insurance and the quality of those choices is crucial information for policymakers. This paper uses a choice experiment to evaluate choice quality and how this interacts with an important form of complexity—product bundling. The results indicate that consumers are likely to make choices that violate expected utility theory, use heuristic decision strategies, and overinsure relative to minimizing out-of-pocket costs. Product bundling is found to exacerbate all of these tendencies. The experimental approach used overcomes some limitations of revealed preference research in this area, such as the endogeneity of choosing bundled insurance.