Testing for adverse selection in insurance markets
By: Alma Cohen and Peter Siegelman.
Contributors: Siegelman, Peter, Professor of Law.; John M. Olin Center for Law, Economics, and Business.
Series: Discussion paper -- no. 651; Discussion paper (John M. Olin Center for Law, Economics, and Business : Online) -- no. 651.
Publisher: Harvard Law School
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Adverse selection (Insurance); Risk (Insurance)
Description: "Abstract: This paper reviews and evaluates the empirical literature on adverse selection in insurance markets.  We focus on empirical work that seeks to test the basic coverage--risk prediction of adverse selection theory--that is, that policyholders who purchase more insurance coverage tend to be riskier.  The analysis of this body of work, we argue, indicates that whether such a correlation exists varies across insurance markets and pools of insurance policies.  We discuss various reasons why a coverage--risk correlation may be found in some pools of insurance policies but not in others.  We also review the work on the disentangling of adverse selection and moral hazard and on learning by policyholders and insurers"--John M. Olin Center for Law, Economics, and Business web site.
Notes: Title from PDF file as viewed on 12/9/2009.

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