The Two Margin Problem in Insurance Markets

Michael Geruso, Timothy Layton, Grace McCormack and Mark Shepard
Additional contact information
Michael Geruso: University of Texas at Austin
Grace McCormack: Harvard University
Mark Shepard: Harvard Kennedy School

Working Paper Series from Harvard University, John F. Kennedy School of Government

Abstract: Insurance markets often feature consumer sorting along both an extensive margin (whether to buy) and an intensive margin (which plan to buy). We present a new graphical theoretical framework that extends a workhorse model to incorporate both selection margins simultaneously. A key insight from our framework is that policies aimed at addressing one margin of selection often involve an economically meaningful tradeoff on the other margin in terms of prices, enrollment,and welfare. Using data from Massachusetts, we illustrate these tradeoffs in an empirical sufficient statistics approach that is tightly linked to the graphical framework we develop.

Date: 2019-11
New Economics Papers: this item is included in nep-ias and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://research.hks.harvard.edu/publications/getFile.aspx?Id=3846

Related works:
Journal Article: The Two-Margin Problem in Insurance Markets (2023)
Working Paper: The Two Margin Problem in Insurance Markets (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:ecl:harjfk:rwp19-035

Access Statistics for this paper

More papers in Working Paper Series from Harvard University, John F. Kennedy School of Government Contact information at EDIRC.
Bibliographic data for series maintained by (workingpapers@econlit.org).