QUANTIFYING THE PREMIUM EXTERNALITY OF THE UNINSURED

• 成果类型: Article
• 署名作者: Sun, Stephen (Teng); Yannelis, Constantine
• 署名单位: Peking University; Stanford University
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1111/jeea.12148
• 发表日期: 2016
• 页码: 405-437
• 关键词: automobile insurance; moral hazard; asymmetric information; adverse selection; weak instruments; variables

摘要

In insurance markets, the uninsured can generate a negative externality on the insured, leading insurance companies to charge higher premia. Using a novel panel data set and a staggered policy change that introduces exogenous variation in the rate of uninsured drivers at the county level in California, we find that uninsured drivers lead to higher insurance premia: a 1 percentage point increase in the rate of uninsured drivers raises premia by roughly1%. We calculate the monetary fine on the uninsured that would fully internalize the externality and conclude that actual fines in most US states are inefficiently low.