Beyond Testing: Empirical Models of Insurance Markets

Posted: 18 Oct 2010  

Liran Einav

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Amy Finkelstein

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Jonathan Levin

Stanford University - Department of Economics; Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2010

Abstract

We describe recent advances in the empirical analysis of insurance markets. This new research proposes ways to estimate individual demand for insurance and the relationship between prices and insurer costs in the presence of adverse and advantageous selection. We discuss how these models permit the measurement of welfare distortions arising from asymmetric information and the welfare consequences of potential government policy responses. We also discuss some challenges in modeling imperfect competition between insurers and outline a series of open research questions.

Suggested Citation

Einav, Liran and Finkelstein, Amy and Levin, Jonathan, Beyond Testing: Empirical Models of Insurance Markets (March 2010). Annual Review of Economics, Vol. 2, pp. 311-336, 2010. Available at SSRN: https://ssrn.com/abstract=1693011 or http://dx.doi.org/10.1146/annurev.economics.050708.143254

Liran Einav (Contact Author)

Stanford University - Department of Economics ( email )

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Stanford, CA 94305-6072
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Amy Finkelstein

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Cambridge, MA 02142
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617-588-0361 (Phone)
617-868-7242 (Fax)

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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Jonathan D. Levin

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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