Journal
JOURNAL OF HEALTH ECONOMICS
Volume 79, Issue -, Pages -Publisher
ELSEVIER
DOI: 10.1016/j.jhealeco.2021.102505
Keywords
Health spillovers; Health behavior; Consumer learning
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The study investigates how family spillovers influence healthcare consumption, showing significant effects on both behavioral and learning channels. Health shocks trigger behavioral changes and increase medical expenditure, as well as promote health investment. The findings contribute to existing literature by highlighting the complex mechanisms of family influences on healthcare decisions.
I study how family spillovers shape healthcare consumption through two main sources: a learning channel whereby family members share information about their health insurance and the effec-tiveness of healthcare, and a behavioral channel whereby risk perception and habits are shared and transmitted. I exploit two types of sudden health shocks to identify a causal effect operating through each channel: a spouse's non-fatal heart attack or stroke and a severe injury to a child. I incorporate these shocks into an event-study framework to quantify the effect of spillovers on healthcare consumption of a non-injured adult family member. I find a significant behavioral spillover effect of an increase of more than 200% in medical expenditure of preventive care over a four-year horizon. Moreover, I find a strong and persistent learning spillover that amounts to an average increase of more than 150% in medical expenditure relative to prior to the health shock, and I demonstrate that this effect promotes health investment. While the first result is in line with previous findings in the literature, the second is novel.
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