Multiple dimensions of private information: Evidence from the long-term care insurance market

• 成果类型: Article
• 署名作者: Finkelstein, Amy; McGarry, Kathleen
• 署名单位: Massachusetts Institute of Technology (MIT); National Bureau of Economic Research; University of California System; University of California Los Angeles
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.96.4.938
• 发表日期: 2006
• 页码: 938-958
• 关键词: Adverse selection; subjective probabilities; asymmetric information; expectations; HEALTH

摘要

We demonstrate the existence of multiple dimensions of private information in the long-term care insurance market. Two types of people purchase insurance: individuals with private information that they are high risk and individuals. with private information that they have strong taste for insurance. Ex post, the former are higher risk than insurance companies expect, while the latter are lower risk. In aggregate, those with more insurance are not higher risk. Our results demonstrate that insurance markets may suffer from asymmetric information even absent a positive correlation between insurance coverage and risk occurrence. The results also suggest a general test for asymmetric information.