Beyond Statistics: The Economic Content of Risk Scores

• 成果类型: Article
• 署名作者: Einav, Liran; Finkelstein, Amy; Kluender, Raymond; Schrimpf, Paul
• 署名单位: Stanford University; National Bureau of Economic Research; Massachusetts Institute of Technology (MIT); University of British Columbia
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20150131
• 发表日期: 2016
• 页码: 195-224
• 关键词: Moral hazard; selection; adjustment; respond

摘要

Big data and statistical techniques to score potential transactions have transformed insurance and credit markets. In this paper, we observe that these widely-used statistical scores summarize a much richer heterogeneity, and may be endogenous to the context in which they get applied. We demonstrate this point empirically using data from Medicare Part D, showing that risk scores confound underlying health and endogenous spending response to insurance. We then illustrate theoretically that when individuals have heterogeneous behavioral responses to contracts, strategic incentives for cream-skimming can still exist, even in the presence of perfect risk scoring under a given contract.