MORE ON THE ECONOMIC-EFFICIENCY OF MIXED PUBLIC PRIVATE INSURANCE/

Blomqvist and Johansson (1996) criticize my results regarding Besley's (Besley, 1989) analysis of public catastrophic coverage. They concede that my analysis was correct under the assumptions I made, but they a rgue that a more general model than Besley or I used might yield diffe rent results. Unfortunately, Blomqvist and Johansson's analysis of the more general case is flawed. Whereas they claim to have provided a mo re general argument against the sort of public intervention Besley pro posed, they have unwittingly discovered an example in which his origin al conjecture holds. (C) 1997 Elsevier Science S.A.