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

Shinya Sugawara () and Yasuhiro Omori ()

No CIRJE-F-849, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: This paper proposes a simple econometric framework that can identify moral hazard and selection problems separately in insurance markets. Although our methodology requires behavioral assumptions on the consumer's optimization, we show that these assumptions are necessary for the separate identification of the two sources of information asymmetry. Our method is applied to the dental insurance market in the United States. In addition to standard moral hazard, we find advantageous selection, which is not detected by a conventional methodology.

Pages: 33 pages
Date: 2012-04
New Economics Papers: this item is included in nep-com, nep-cta, nep-hea and nep-ias
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Journal Article: An Econometric Analysis of Insurance Markets with Separate Identification for Moral Hazard and Selection Problems (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2012cf849

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