Better Safe than Sorry? Ex Ante and Ex Post Moral Hazard in Dynamic Insurance Data

Abbring, Jaap H.; Chiappori, Pierre‐André; Zavadil, Tibor

doi:10.2139/ssrn.1260168

Cited by 51 publications

(50 citation statements)

References 33 publications

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“…2 States with higher insurance minimums tend to have more uninsured drivers, further accentuating the underreporting bias. 3 Support for this argument comes from Ma and Schmit (2000), who find that higher poverty rates are associated with more uninsured drivers. Second, not all states measure and report traffic collisions in the same way, making it a very unrepresentative and unbalanced panel of states.…”

Section: Datamentioning

confidence: 99%

“…Insurance Research Council's Uninsured Motorists 2014 Edition reports that about 13 percent of drivers were uninsured in 2012, with Oklahoma topping the list with 26 percent and Massachusetts at the bottom with 4 percent. 3 Consumer Federation of America claims that most uninsured drivers have low incomes and struggle to afford the high-priced minimum liability coverage now required by all states, except for New Hampshire. 4 Pairwise correlation is 0.99 between per person and per accident medical liability and 0.63 between per person/accident medical and property liability.…”

Section: Datamentioning

confidence: 99%

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On the road again: traffic fatalities and auto insurance minimums

Yakovlev

Orr-Magulick²

2018

pse

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Section: Datamentioning

confidence: 99%

Section: Datamentioning

confidence: 99%

On the road again: traffic fatalities and auto insurance minimums

Yakovlev

Orr-Magulick²

2018

pse

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“…; see also Cohen and Siegelman (2010) and sources cited therein for discussion of attempts to distinguish adverse selection from moral hazard). In recent work, Abbring, Chiappori and Zavadil (2008) review the prior literature and use advanced econometric techniques and Dutch automobile insurance data to separate these effects. They find both ex ante and ex post moral hazard effects from the unique experience rating system in Dutch automobile insurance, which contains features that facilitate the econometric separation of these effects.…”

Section: Table 2 About Herementioning

confidence: 99%

The law and economics of liability insurance: A theoretical and empirical review

Baker¹,

Siegelman²

2015

Research Handbook on the Economics of Insurance Law

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We survey the theoretical and empirical literature on the law and economics of liability insurance. The canonical Shavell model predicts that, despite the presence of some ex ante moral hazard (care-reduction by insureds), liability insurance will generally raise welfare because its risk-spreading gains will likely be larger than its adverse effects on precautionary activities. We discuss the numerous features of liability insurance contracts that are designed to reduce ex ante moral hazard, and examine the evidence of their effects. Most studies conclude that these features work reasonably well, so that liability insurance probably does not generate substantial ex ante moral hazard. Its effects on ex post moral hazard (the increased tendency of victims to sue in the presence of insurance) are not as clear, however, and the welfare consequences of increased litigation are ambiguous, for reasons we explain. We discuss additional issues such as the effects of liability insurance when some defendants are judgment-proof, the problems posed by non-independence of liability risks owing to changes in legal doctrines, and the cyclical nature of liability insurance markets.3

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“…Until recently, the evidence for ex-ante moral hazard has quite extensively been observed in certain insurance sectors, such as car insurance (Abbring et al 2008) or work disability insurance. In the case of car insurance for example, it has been observed that taking up an insurance has led to, in certain cases, an increase in the number of claims, as insured take up more risks when driving and anticipate the insurance coverage in case of an accident (Abbring et al 2008).…”

Section: Health Insurance and Attitudes Towards Health Risks: Ex-antementioning

confidence: 99%

Health Insurance and Health Environment: India's Subsidized Health Insurance in a Context of Limited Water and Sanitation Services

McBain

2014

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractRecently, many emerging countries have established subsidized health insurance schemes to provide financial protection and support access to health care to poor households. The challenge to ensure the long term sustainability of such schemes is huge. In this paper, the impact of the health environment on the long term sustainability of a health insurance is explored, focusing on water and sanitation. India offers an interesting case to explore this question. Indeed, since 2008 India launched a fully subsidized health insurance Rashtriya Swasthya Bima Yojana (RSBY) in a context where 56% of its population does not have access to safe sanitation and 8% do not have access to safe water (JMP, 2012). A framework is proposed linking water supply and sanitation; health status of the insured population; health insurance and the productivity of households. Next, based on a literature review, the outcomes of investments in water and sanitation and health insurance are reviewed and the potential synergies and trade-offs of combing these investments are explored. In a last section, the case of India is analysed in detail, with international comparisons and further research lines are proposed.

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Better Safe than Sorry? Ex Ante and Ex Post Moral Hazard in Dynamic Insurance Data

Cited by 51 publications

References 33 publications

On the road again: traffic fatalities and auto insurance minimums

On the road again: traffic fatalities and auto insurance minimums

The law and economics of liability insurance: A theoretical and empirical review

Health Insurance and Health Environment: India's Subsidized Health Insurance in a Context of Limited Water and Sanitation Services

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