University of Wisconsin
Department of Economics
Economics 236: Health Economics and Policy
Korinna K. Hansen
Group Assignment 2
Due Date: Friday, Sept. 29
Reading Assignment: Phelps, Chapter 5
Problem Assignment:
The Rand Health Insurance Experiment was a large randomized control trial that was
designed to study the effect of health insurance coverage on the demand for medical care.
The following questions concern the findings of this experiment.
For each one of the questions you should be able to communicate to an audience all
important relevant information in a well organized and concise way. Make sure that you
are ready to present enough detail.
(1) What is the size of the elasticity of demand for medical care? How does it differ
between hospital care and dental or well care?
(2) Did the study offer any other valuable conclusions regarding the demand for dental
care?
(3) Are inpatient and outpatient care substitutes or complements?
(4) What is the effect of a deductible in the medical care consumption?
(5) What are the study’s conclusions about the systematic factors like age and gender?
(6) What (if any) are the study’s conclusions about the quality of medical care?