IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v112y2011i1p113-115.html
   My bibliography  Save this article

Is there dynamic adverse selection in the life insurance market?

Author

Listed:
  • He, Daifeng

Abstract

This paper finds evidence of dynamic adverse selection in the life insurance market. Lower-risk individuals are more likely to cancel a policy, and to cancel one of greater face value conditional on cancelation, than are individuals with higher mortality risk.

Suggested Citation

  • He, Daifeng, 2011. "Is there dynamic adverse selection in the life insurance market?," Economics Letters, Elsevier, vol. 112(1), pages 113-115, July.
    • Handle: RePEc:eee:ecolet:v:112:y:2011:i:1:p:113-115
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176511001406
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Amy Finkelstein & Kathleen McGarry & Amir Sufi, 2005. "Dynamic Inefficiencies in Insurance Markets: Evidence from Long-Term Care Insurance," American Economic Review, American Economic Association, vol. 95(2), pages 224-228, May.
    2. Igal Hendel & Alessandro Lizzeri, 2003. "The Role of Commitment in Dynamic Contracts: Evidence from Life Insurance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 299-328.
    3. Mathias Dewatripont & Lars Peter Hansen & Stephen Turnovsky, 2003. "Advances in Economics and Econometrics: Theory and Applications, Eighth World Congress," ULB Institutional Repository 2013/176003, ULB -- Universite Libre de Bruxelles.
    4. He, Daifeng, 2009. "The life insurance market: Asymmetric information revisited," Journal of Public Economics, Elsevier, vol. 93(9-10), pages 1090-1097, October.
    5. Bernard Salanié, 2003. "Testing Contract Theory," CESifo Economic Studies, CESifo Group, vol. 49(3), pages 461-477.
    6. Amy Finkelstein & Kathleen McGarry, 2006. "Multiple Dimensions of Private Information: Evidence from the Long-Term Care Insurance Market," American Economic Review, American Economic Association, vol. 96(4), pages 938-958, September.
    7. Cochrane, John H, 1995. "Time-Consistent Health Insurance," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 445-473, June.
    8. Cardon, James H & Hendel, Igal, 2001. "Asymmetric Information in Health Insurance: Evidence from the National Medical Expenditure Survey," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 408-427, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Timothy F. Harris & Aaron Yelowitz, 2018. "Racial disparities in life insurance coverage," Applied Economics, Taylor & Francis Journals, vol. 50(1), pages 94-107, January.
    2. Timothy F. Harris & Aaron Yelowitz & Charles Courtemanche, 2021. "Did COVID‐19 change life insurance offerings?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(4), pages 831-861, December.
    3. Ropponen, Olli & Kuusi, Tero & Valkonen, Tarmo, 2022. "Mind the Gap – Assessing the Size and Determinants of the Life Insurance Gap," ETLA Working Papers 96, The Research Institute of the Finnish Economy.
    4. Timothy F. Harris & Aaron Yelowitz, 2017. "Nudging Life Insurance Holdings In The Workplace," Economic Inquiry, Western Economic Association International, vol. 55(2), pages 951-981, April.
    5. Timothy F. Harris & Aaron Yelowitz & Jeffery Talbert & Alison Davis, 2023. "Adverse selection in the group life insurance market," Economic Inquiry, Western Economic Association International, vol. 61(4), pages 911-941, October.
    6. Srbinoski Bojan & Strozzi Fernanda & Poposki Klime & Born Patricia H., 2020. "Trends in Life Insurance Demand and Lapse Literature," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 14(2), pages 1-46, July.
    7. Harris, Timothy & Yelowitz, Aaron, 2014. "Is there adverse selection in the life insurance market? Evidence from a representative sample of purchasers," Economics Letters, Elsevier, vol. 124(3), pages 520-522.
    8. Harris, Timothy F. & Yelowitz, Aaron & Talbert, Jeffery & Davis, Alison, 2022. "Adverse Selection in the Group Life Insurance Market," IZA Discussion Papers 14985, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Annette Hofmann & Mark Browne, 2013. "One-sided commitment in dynamic insurance contracts: Evidence from private health insurance in Germany," Journal of Risk and Uncertainty, Springer, vol. 46(1), pages 81-112, February.
    2. Ciprian MatiÅŸ & Eugenia MatiÅŸ, 2013. "Asymmetric Information In Insurance Field: Some General Considerations," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(15), pages 1-17.
    3. Soheil Ghili & Ben Handel & Igal Hendel & Michael D. Whinston, 2019. "Optimal Long-Term Health Insurance Contracts: Characterization, Computation, and Welfare Effects," Cowles Foundation Discussion Papers 2218R, Cowles Foundation for Research in Economics, Yale University, revised Jul 2020.
    4. Martin Dumav, 2013. "Health Insurance over the Life Cycle with Adverse Selection," 2013 Meeting Papers 1138, Society for Economic Dynamics.
    5. Alma Cohen & Peter Siegelman, 2010. "Testing for Adverse Selection in Insurance Markets," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(1), pages 39-84, March.
    6. Benjamin R. Handel & Igal Hendel & Michael D. Whinston, 2013. "Equilibria in Health Exchanges: Adverse Selection vs. Reclassification Risk," NBER Working Papers 19399, National Bureau of Economic Research, Inc.
    7. Liran Einav & Amy Finkelstein & Jonathan Levin, 2010. "Beyond Testing: Empirical Models of Insurance Markets," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 311-336, September.
    8. Wiseman, Thomas, 2018. "Competitive long-term health insurance," Journal of Health Economics, Elsevier, vol. 58(C), pages 144-150.
    9. Soheil Ghili & Ben Handel & Igal Hendel & Michael D. Whinston, 2019. "Optimal Long-Term Health Insurance Contracts: Characterization, Computation, and Welfare Effects," Cowles Foundation Discussion Papers 2218R2, Cowles Foundation for Research in Economics, Yale University, revised May 2021.
    10. Nathaniel Hendren & Camille Landais & Johannes Spinnewijn, 2021. "Choice in Insurance Markets: A Pigouvian Approach to Social Insurance Design," Annual Review of Economics, Annual Reviews, vol. 13(1), pages 457-486, August.
    11. Raj Chetty & Amy Finkelstein, 2012. "Social Insurance: Connecting Theory to Data," NBER Working Papers 18433, National Bureau of Economic Research, Inc.
    12. Daniel Garcia & Roee Teper & Matan Tsur, 2018. "Information Design in Insurance Markets: Selling Peaches in a Market for Lemons," CESifo Working Paper Series 6853, CESifo.
    13. Leora Friedberg & Wenliang Hou & Wei Sun & Anthony Webb, 2023. "Lapses in long‐term care insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 90(3), pages 569-595, September.
    14. Juan Pablo Atal & Hanming Fang & Martin Karlsson & Nicolas R. Ziebarth, 2020. "Long-Term Health Insurance: Theory Meets Evidence," PIER Working Paper Archive 20-009, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    15. Benjamin R. Handel & Igal Hendel & Michael D. Whinston, 2017. "The Welfare Effects of Long-Term Health Insurance Contracts," NBER Working Papers 23624, National Bureau of Economic Research, Inc.
    16. Amelie C. Wuppermann, 2017. "Private Information in Life Insurance, Annuity, and Health Insurance Markets," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(4), pages 855-881, October.
    17. Martin Eling & Ruo Jia & Yi Yao, 2017. "Between-Group Adverse Selection: Evidence From Group Critical Illness Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 84(2), pages 771-809, June.
    18. Martin Gaynor & Kate Ho & Robert J. Town, 2015. "The Industrial Organization of Health-Care Markets," Journal of Economic Literature, American Economic Association, vol. 53(2), pages 235-284, June.
    19. Amy Finkelstein & Kathleen McGarry & Amir Sufi, 2005. "Dynamic Inefficiencies in Insurance Markets: Evidence from Long-Term Care Insurance," American Economic Review, American Economic Association, vol. 95(2), pages 224-228, May.
    20. Andrea Attar & Thomas Mariotti & François Salanié, 2022. "Regulating Insurance Markets: Multiple Contracting And Adverse Selection," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(3), pages 981-1020, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:112:y:2011:i:1:p:113-115. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.