Home equity commitment and long-term care insurance demand

TitleHome equity commitment and long-term care insurance demand
Publication TypeJournal Article
Year of Publication2010
AuthorsDavidoff, T
JournalJournal of Public Economics
KeywordsHealthcare, Housing

This paper shows how home equity may substitute for long-term care insurance (LTCI). The elderly commonly hold substantial wealth in the form of home equity that is rarely spent before death, except for after moves to long-term care facilities. Absent strong bequest motives implies that marginal utility fluctuates less across health states than one would predict based on a standard model without wealth tied up in housing. Numerical examples show that this asset commitment may substantially weaken LTCI demand.

Endnote Keywords

Health care markets/Housing

Endnote ID


Citation Key7483