Replication data for: The RAND Health Insurance Experiment, Three Decades Later
Principal Investigator(s): View help for Principal Investigator(s) Aviva Aron-Dine; Liran Einav; Amy Finkelstein
Version: View help for Version V1
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LICENSE.txt | text/plain | 14.6 KB | 10/12/2019 01:52:PM |
_readme.txt | text/plain | 856 bytes | 10/12/2019 01:52:PM |
tables.do | text/plain | 61.7 KB | 10/12/2019 01:52:PM |
Project Citation:
Aron-Dine, Aviva, Einav, Liran, and Finkelstein, Amy. Replication data for: The RAND Health Insurance Experiment, Three Decades Later. Nashville, TN: American Economic Association [publisher], 2013. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113919V1
Project Description
Summary:
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Between 1974 and 1981, the RAND health insurance experiment provided health insurance to more than 5,800 individuals from about 2,000 households in six different locations across the
United States, a sample designed to be representative of families with adults under the age of 62. More than three decades later, the RAND results are still widely held to be the "gold standard" of
evidence for predicting the likely impact of health insurance reforms on medical spending, as well as for designing actual insurance policies. On cost grounds alone, we are unlikely to see
something like the RAND experiment again. In this essay, we reexamine the core findings of the RAND health insurance experiment in light of the subsequent three decades of work on the
analysis of randomized experiments and the economics of moral hazard. First, we re-present the main findings of the RAND experiment in a manner more similar to the way they would be
presented today. Second, we reexamine the validity of the experimental treatment effects. Finally, we reconsider the famous RAND estimate that the elasticity of medical spending with
respect to its out-of pocket price is -0.2. We draw a contrast between how this elasticity was originally estimated and how it has been subsequently applied, and more generally we caution
against trying to summarize the experimental treatment effects from nonlinear health insurance contracts using a single price elasticity.
Scope of Project
JEL Classification:
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G22 Insurance; Insurance Companies; Actuarial Studies
I13 Health Insurance, Public and Private
I18 Health: Government Policy; Regulation; Public Health
G22 Insurance; Insurance Companies; Actuarial Studies
I13 Health Insurance, Public and Private
I18 Health: Government Policy; Regulation; Public Health
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