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Subsidizing risk prevention
Journal of Economics ( IF 1.6 ) Pub Date : 2021-05-22 , DOI: 10.1007/s00712-021-00744-w
Mario Menegatti

This work examines the effects of different kinds of subsidies on risk prevention from a theoretical standpoint. We show that both a subsidy on the cost of prevention activities and a subsidy on wealth have ambiguous effects on the level of present contemporaneous prevention. Similar kinds of subsidies have however increasing effects on the level of advance prevention and, under plausible assumptions, on future levels of contemporaneous prevention. We also show that social security subsidies may have decreasing effects on prevention activities while a kind of reverse social security has an increasing effects on them. This indicates that there is a trade-off between the social security aim of mitigating the negative consequences of bad events and the prevention aim of incentivizing choices which reduce the probability that these bad events occur.



中文翻译:

资助风险预防

这项工作从理论的角度考察了各种补贴对风险预防的影响。我们表明,对预防活动成本的补贴和对财富的补贴都对当前同期预防水平产生模糊影响。但是,类似的补贴对事前预防的水平以及在合理的假设下,对未来同期预防水平的影响越来越大。我们还表明,社会保障补贴对预防活动的影响可能会减小,而一种反向的社会保障对它们的影响则会增加。这表明在减轻不良事件的负面影响的社会保障目标与激励减少这些不良事件发生可能性的选择的预防目标之间存在折衷。

更新日期:2021-05-22
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