An Econometric Analysis of Insurance Markets with Separate Identification for Moral Hazard and Selection Problems

Shinya Sugawara () and Yasuhiro Omori ()

Computational Economics, 2017, vol. 50, issue 3, No 6, 473-502

Abstract: Abstract This paper proposes a simple microeconometric framework that can separately identify moral hazard and selection problems in insurance markets. Our econometric model is equivalent to the approach that is utilized for entry game analyses. We employ a Bayesian estimation approach to handle a partial identification problem. We also propose a statistical model selection method to detect an information structure that consumers face. Our method is applied to the dental insurance market in the United States. In this market, we find not only standard moral hazard but also advantageous selection, which has an intuitive interpretation in the context of dental insurance.

Keywords: Asymmetric information; Insurance; Partial identification; Bayesian statistics; Dental care (search for similar items in EconPapers)
Date: 2017
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Working Paper: An Econometric Analysis of Insurance Markets with Separate Identification for Moral Hazard and Selection Problems (2012)
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DOI: 10.1007/s10614-016-9594-z

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