Saturday, July 14, 2012

Will ObamaCare Make Us Fat?

Miles Kimball reports on a paper co-authored by Isaac Ehrlich entitled The Problem of the Uninsured—Implications for Health Insurance:
Sam Peltzman’s argument that requiring people to wear seat belts would make them feel safer, and therefore lead them to drive faster. This is now called the Peltzman effect, and I will refer you to Greg Mankiw’s post on “The Peltzman Effect” for a discussion of it. In his presentation, Isaac points out that there will be the same kind of effect if you require people to have health insurance. They will feel safer in relation to their health, and so will take more risks. For example, a young person who has to pay full price for the visit to the doctor for antiobiotics to treat an STD may be more careful to use or insist on a condom. He and his coauthor Yong Yin have a theoretical model showing that such effects can be substantial in size. Notice that it should be possible to get good empirical evidence on such effects.
In other words, Ehrlich is claiming now that the poor have health insurance, they will work out less and will eat more junk food. Isaac Ehrlich – where have we heard this name before? His 1975 publication The Deterrent Effect of Capital Punishment is often cited by advocates of capital punishment but be mindful of the various critiques of Ehrlich’s alleged evidence, which we noted here. Miles notes that this paper is not readily available yet and admits it is only a theoretical argument. I just hope that those who decide to do empirical work are mindful of what Ed Leamer wrote years ago.


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