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Welfare Implications of Proprietary Data Collection: An Application to Telematics in Auto Insurance

Imke Reimers and Benjamin Shiller ()
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Benjamin Shiller: Brandeis University

No 119R, Working Papers from Brandeis University, Department of Economics and International Businesss School

Abstract: Concerns about anti-competitive effects of proprietary data collection have motivated recent European data portability laws. We investigate such concerns and search for evidence of direct benefits of data collection in the context of Pay How You Drive (PHYD) auto insurance, which offers tailored discounts to drivers monitored by telematics devices. We exploit the staggered entry of PHYD insurance across states and insurers in a difference-in-differences framework, and we replicate the main findings using state insurance regulations as instruments for entry timing. We find a meaningful impact of PHYD programs on fatal accidents, but we find no evidence of antitrust concerns.

Keywords: Proprietary data; data portability; oligopoly; economic competition; asymmetric information (search for similar items in EconPapers)
JEL-codes: D43 D82 L13 L40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ias and nep-tre
Date: 2018-01, Revised 2018-05
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