|Title||Home equity commitment and long-term care insurance demand|
|Publication Type||Journal Article|
|Year of Publication||2010|
|Journal||Journal of Public Economics|
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|| |