USING EYE ONTHE U.S. ECONOMY

nInsurance in theUnited States

How risk-averseis theUnited Statesas a whole? What percentage of our income do we devote to avoiding outcomeswhich may never take place? This article shows how much Americans spend on thefour most frequently purchased types of insurance. After describing the fourmajor types of insurance (and before showing them this figure), ask yourstudents to rank them in terms of what they think the largest to smallestamounts of expenditures are. Given that auto insurance is likely to be thebiggest insurance expenditure most of your college students directly see intheir lives, they may be surprised it’s actually the smallest insurance expenditure.

nHealth Care in the United States: A Snapshot

This Eye shouldspark plenty of debate about the appropriate role of government intervention inthe provision of health care. One way to promote debate is to break studentsinto four groups and give them a health care structure to support – the currentU.S. plan (a mixture of private health insurance paid for by individuals andemployers and government health programs for certain groups), a completelyprivate health insurance system with no government intervention, acomprehensive national health care system, and the health-care voucher systemproposed by Kotlikoff. Allow the groups a few minutes to discuss the strengthsassociated with their plan (and the weaknesses associated with the competingplans) in terms of efficiency and equality and then pitch their case to theclass. At the conclusion of the presentations, have students vote on which planthey believe would be best for the country.

USING EYE ONTHE global economy

n   Health-CareExpenditures and Health Outcomes

This Eyehighlights a major paradox in the U.S. health-care system: “The best healthcare in America is the best in the world,” but measurements of overall healthoutcomes are well below other advanced economies. Much of this is attributableto the unequal access to quality health care. These health care trends are alsoconsistent with income trends in the United States. While the United States hasthe world’s highest total annual income and ranks right around the highest inthe world in a measurement of average income, it ranks approximately 97^thin a measurement of income equality (below not only the advanced economies, butalso many of the developing economies). For those with high incomes, the qualityof health care available in the U.S. is unparalleled. Unfortunately for manyAmericans, quality health care is well beyond their financial reach. Outside ofthe unequal access to quality health care, what else might account for the relativelypoor health outcomes? Can government improve these health outcomes withoutsimply throwing more money at the problem? How can individuals improve thesehealth outcomes without the aid of government?

USING EYE ONYOUR LIFE

nSignaling Your Ability

Every day, wesend economic signals. Here, the signals about our reliability as prospectiveemployees are explored. You can ask your class to list other situations ineveryday life in which we send signals (consciously or unconsciously). Perhapsthe way they dress, act, or speak when interacting with parents? Professors?Law-enforcement officials? Friends? A significant other? A date? Are thesesignals always accurate portrayals of reality that help inform the uninformedparty or are they signals that continue (or even magnify) asymmetric information?