Adverse Selection in Low-Income Health Insurance Markets: Evidence from an RCT in Pakistani

• 成果类型: Article
• 署名作者: Fischer, Torben; Froelich, Markus; Landmann, Andreas
• 署名单位: University of Mannheim; University of Erlangen Nuremberg
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20200639
• 发表日期: 2023
• 页码: 313-340
• 关键词: Asymmetric information; child labor; demand; care; uncertainty; welfare; ECONOMICS; RISK

摘要

We present robust evidence on adverse selection in hospitalization insurance for low-income individuals that received first-time access to insurance. A large randomized control trial from Pakistan allows us to separate adverse selection from moral hazard, estimate how selection changes at different points of the demand curve, and test simple measures to limit adverse selection. The results reveal sub-stantial selection in individual policies, leading to welfare losses and the threat of a market breakdown. Bundling insurance policies at the household level or higher almost eliminates adverse selection, thus mitigating its welfare consequences and facilitating sustainable insurance supply. (JEL D82, G22, I13, I18, O15, O16)