Discuss the factors that determine income elasticity of demand of health insurance.© BrainMass Inc. brainmass.com March 5, 2021, 12:49 am ad1c9bdddf
A very key factor that determines the income elasticity of demand of health insurance would of course be an increase in the income of individuals that demand of a particular level of health insurance. A situation of this nature will in all probability have a positive income elasticity of demand due to the fact that the increase in income will result in these individuals probably upgrading the level of their insurance coverage, as well as providing coverage for individuals within their households. Another key factor that determines the income elasticity of demand of health insurance, would be a decline in the income or spendable income to individuals that purchase a given level of health insurance experience. A situation of this nature would probably result in a negative income elasticity of demand for health insurance, due to the fact that individuals will tend to ...