Beyond Testing: Empirical Models of Insurance Markets

40 Pages Posted: 18 Aug 2009 Last revised: 23 Feb 2023

See all articles by Liran Einav

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

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Date Written: August 2009

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 D., Beyond Testing: Empirical Models of Insurance Markets (August 2009). NBER Working Paper No. w15241, Available at SSRN: https://ssrn.com/abstract=1454975

Liran Einav (Contact Author)

Stanford University - Department of Economics ( email )

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Amy Finkelstein

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Jonathan D. Levin

Stanford Graduate School of Business ( email )

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Stanford University - Department of Economics ( email )

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United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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