| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP5653 |
| DP5653 Comprehensive versus Selective Schooling in England and Wales: What Do We Know? | |
| Jorn-Steffen Pischke; Alan Manning | |
| 发表日期 | 2006-04-25 |
| 出版年 | 2006 |
| 语种 | 英语 |
| 摘要 | Empirical testing of asymmetric information in the insurance market has uncovered a negative correlation between risk levels and insurance purchases, rather than the positive correlation predicted by the standard insurance theory. Hemenway (1990) proposes an explanation for this negative correlation, called 'propitious selection''. He argues that potential insurance buyers have different tastes for risk and that 'individuals who are highly risk avoiding are more likely both to try to reduce the hazard and to purchase insurance' (p. 1064). Chiappori and Salanié (2000) also suggest that this line of argument, which they call 'cherry picking', may explain the observed negative correlation. In this paper, we show that the propitious selection argument does not imply negative correlation between risk levels and insurance purchases, be-cause it fails to take into account the supply side of the insurance market. To illustrate this claim, we provide a model where, although we assume that individuals differ in risk aversion and that the more risk averse individuals exert more precaution and buy more insurance, we end up with a positive correlation between risk and insurance purchases at equilibrium. The reason is that, in any separating equilibrium, the more risk averse individuals face insurance overprovision which, combined with moral hazard, increases their risk relative to the less risk averse individuals. To obtain the negative correlation between risk and insurance purchases, one further needs the extra condition of decreasing marginal willingness to pay for the less risk averse individuals. Finally, we find that propitious selection has profound policy implications for social insurance. |
| 主题 | Public Economics |
| 关键词 | Preference-based adverse selection Cherry picking Precaution Social insurance |
| URL | https://cepr.org/publications/dp5653 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/534500 |
| 推荐引用方式 GB/T 7714 | Jorn-Steffen Pischke,Alan Manning. DP5653 Comprehensive versus Selective Schooling in England and Wales: What Do We Know?. 2006. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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