Private medical insurance and saving: evidence from the British household panel survey

This paper investigates whether individuals in Britain save to self-insure against health risk. In particular, we use the British Household Panel Survey for the years 1996 to 1998 to test the hypothesis that those individuals who are not covered by private medical insurance, and are therefore more prone to health risk, tend to save more than those who are covered. Our findings, which are based on a wide range of econometric specifications, always reject this hypothesis, suggesting that health risk is not a factor which induces British individuals to save more.