WELFARE EFFECTS OF HEALTH INSURANCE IN NIGERIA
- Saheed Olawale Olayiwola
- Olanrewaju Ademola Olaniyan
- ( paper pages. 1 - 30 )
The lower cost of health care services made possible by healthinsurance may lead to moral hazard. Moral hazard createsinefficiency in the health insurance market and loss in welfare. Thispaper investigates moral hazard and welfare effects of healthinsurance in Nigeria. A health care utilization model was estimatedfor moral hazard in the demand for health care using a generalizedmethod of moments. Marshallian, Hicksian and Nyman’s estimateswere used to determine the welfare effects of health insurance. Moralhazard in health insurance was evident in the value of price elasticityof demand for medical care consumption in health insurance, socialand private health insurance with coefficients of 0.16, 0.14 and 0.0001respectively. There were welfare gains (efficient moral hazard) fromthe Marshallian (85.8%), Hicksian (87.5%) and Nyman’s (87.3%)estimates against welfare loss (inefficient moral hazard) of -14.2%, -12.5% and -12.7%. Health insurance increased overall welfare inspite of the moral hazard. Therefore, government should, throughappropriate policies, encourage the expansion of health insurance inNigeria.
Saheed Olawale Olayiwola, Olanrewaju Ademola Olaniyan.
"WELFARE EFFECTS OF HEALTH INSURANCE IN NIGERIA"
The Nigerian Journal of Economic and Social Studies,
61 (3): 1 - 30.