Effects of Insurance Incentives on Road Safety: Evidence from a Natural Experiment in China

Georges Dionne () and Ying Liu

Scandinavian Journal of Economics, 2021, vol. 123, issue 2, 453-477

Abstract: We contribute to the growing body of literature on moral hazard by offering empirical evidence of the effectiveness of insurance pricing incentives at improving road safety. We do this by comparing the claim frequency following a regulatory reform introduced in a pilot city in China, with the experience of another city unaffected by the reform. By using a difference‐in‐differences methodology, we find that improving insurance pricing on past claims and on traffic violations with full industry commitment reduces moral hazard and insured drivers’ claim frequency by 12 percent. The treatment effects are, however, heterogeneous with respect to insured drivers’ wealth and their history of past claims.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/sjoe.12402

Related works:
Working Paper: Effects of Insurance Incentives on Road Safety: Evidence from a Natural Experiment in China (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:scandj:v:123:y:2021:i:2:p:453-477

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0347-0520

Access Statistics for this article

Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten

More articles in Scandinavian Journal of Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().