Regulation on Gene Diagnosis and Non-Existence of Equilibrium in the Life/Medical Insurance Market


This study is based on the assumption that in future, genetic testing will create a situation where people can tell whether they are predisposed to certain diseases including cancer, but utilization of such genetic testing is banned for the purposes of medical examination of insurants. What, then, would be the response of people to genetic testing from an economics perspective? The Human Genome Project has made it possible to decode DNA base sequences, creating a significant impact not only in the biological and medical fields but also on our society as a whole. This paper is an analysis of equilibrium in the life/medical insurance market on the assumption that limits are imposed on the utilization of genetic testing for medical examination of insurants, and shows the possibility that no equilibrium exists in the market, thus drawing a counterintuitive conclusion. Furthermore, this paper also shows that utilization of genetic testing for insurance purposes would, in fact, economically benefit insurants.

Nobuyuki SOGA
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: (81) 78 803 7036
Fax: (81) 78 803 7059