Economics at your fingertips  

Evidence on Adverse Selection: Equilibrium Signaling and Cross-Subsidization in the Insurance Market

Robert Puelz and Arthur Snow

Journal of Political Economy, 1994, vol. 102, issue 2, 236-57

Abstract: The configuration of equilibrium in the market for automobile collision insurance is examined empirically by representing the premium-deductible menu and the demand function as a standard hedonic system. Using contractual data from a representative insurer, the authors estimate a reduced-form hedonic premium equation and the inverse of the marginal bid equation for insurance coverage. The data reveal an equilibrium with adverse selection and market signaling but lead the authors to reject the hypothesis that high risks receive contracts subsidized by low risks. Copyright 1994 by University of Chicago Press.

Date: 1994
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (61) Track citations by RSS feed

Downloads: (external link) full text (application/pdf)
Access to full text is restricted to subscribers. See for details.

Related works:
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:

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Series data maintained by Journals Division ().

Page updated 2017-09-29
Handle: RePEc:ucp:jpolec:v:102:y:1994:i:2:p:236-57