Adverse selection in annuity markets: Evidence from the British Life Annuity Act of 1808

• 成果类型: Article
• 署名作者: Rothschild, Casey G.
• 署名单位: Middlebury College
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2009.01.002
• 发表日期: 2009
• 页码: 776-784
• 关键词: Annuities; adverse selection; advantageous selection

摘要

We study adverse selection using data from an 1808 Act of British Parliament that effectively opened a market for life annuities. Our analysis indicates significant selection effects. The evidence for adverse selection is strongest for a sub-sample of annuitants whose annuities were purchased by profit-seeking speculators, a sub-sample in which advantageous selection resulting from multi-dimensional heterogeneity is unlikely to have been significant. These results support the view that adverse selection can be masked by advantageous selection in empirical studies of standard insurance markets. (C) 2009 Elsevier B.V. All rights reserved.