Testing for asymmetric information in private health insurance

Publication type

Journal Article

Authors

Publication date

March 15, 2013

Summary:

We test for asymmetric information in the UK private health insurance (PHI) market. In contrast to earlier research that considers either a purely private system or one where private insurance is complementary to public insurance, PHI is substitutive of the public system in the UK. Using a theoretical model of competition among insurers incorporating this characteristic, we link the type of selection (adverse or propitious) with the existence of risk-related information asymmetries. Using the British Household Panel Survey, we find evidence that adverse selection is present in the PHI market, which leads us to conclude that such information asymmetries exist.

Published in

Economic Journal

Volume and page numbers

Volume: 123 , p.96 -130

DOI

http://dx/doi.org/10.1111/j.1468-0297.2012.02520.x

ISSN

130133

Subjects

Notes

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