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on Insurance Economics |
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Issue of 2006‒10‒21
five papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Eugene Choo; Michael Denny |
| Abstract: | Health insurance coverage reduces the price perceived by the insured and consequently increases the quantity of health care demanded. We consider vision care insurance because this provides a unique opportunity to observe the differential response to insurance coverage by those with and without a prior medical condition. The results show that there is a response by both groups and the response is larger for those with a prior condition. We also find that vision care insurance is poorly matched in time to the patterns of vision care needs |
| Keywords: | Health Insurance, Vision Care, Prior Conditions |
| JEL: | I10 I12 |
| Date: | 2006–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-259&r=ias |
| By: | van Ours, Jan C.; Vodopivec, Milan |
| Abstract: | This paper investigates how the potential duration of unemployment benefits affects the quality of post-unemployment jobs. It takes advantage of a natural experiment introduced by a change in Slovenia ' s unemployment insurance law that substantially reduced the potential benefit duration. Although this reduction strongly increased job finding rates, the quality of the post-unemployment jobs remained unaffected. The paper finds that the law change had no effect on the type of contract (temporary versus permanent), the duration of the post-unemployment job, or the wage earned in the job. |
| Keywords: | Labor Markets,Youth and Governance,Economic Theory & Research,Social Protections & Assistance,Social Risk Management |
| Date: | 2006–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4031&r=ias |
| By: | Agar Brugiavini (Department of Economics, University Of Venice Cà Foscari); Gwenaël Piaser (Department of Economics, University of Venice Cà Foscari) |
| Abstract: | Using a common agency framework, we characterize possible equilibria when annuities contracts are not exclusive. We discuss theoretical and empirical implications of these equilibria. First, we show that at equilibrium prices are not linear. Then we characterize an equilibrium. We provide conditions for existence and show that this equilibrium is efficient. |
| Keywords: | Menus, Common Agency, Insurance, Annuity Markets, Adverse Selection, Efficiency |
| JEL: | D82 H5 J2 G1 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:39_06&r=ias |
| By: | Aase, Knut K. (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | The paper analyzes the possibility of reaching an equilibrium in a market of marine mutual insurance syndicates, called Protection and Indemnity Clubs, or P&I Clubs for short, displaying economies of scale. Our analysis rationalizes some empirically documented findings, and points out an interesting future scenario. We find an equilibrium in a market of mutual marine insurers, in which some smaller clubs, having operating costs above average, may grow larger relative to the other clubs in order to become more cost effective, and where medium to larger cost efficient clubs may stay unchanged or some even downsize relative to the others. Some of the very large clubs suffering from diseconomies of scale may have a motive to further increase relative to the other clubs. According to observations, most clubs have, during the last decade, expanded significantly in size measured by gross tonnage of entered ships, some clubs have merged, but very few seem to have decreased their underwriting activity, in particular none of the really large ones. The analysis points to the following future scenario: The small and the medium to large clubs converge in size, while there is a possibility for some very large clubs to be present as well. |
| Keywords: | Marine Insurance; syndicated market; P&I clubs; equilibrium; economy of scale; diseconomy of scale |
| JEL: | D50 G22 |
| Date: | 2005–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2005_010&r=ias |
| By: | Chen, Yehning (National Taiwan University); Hasan, Iftekhar (Rensselaer Polytechnic Institute and Bank of Finland) |
| Abstract: | In this paper, we investigate the relationship between the transparency of banks and the fragility of the banking system. We show that information-based bank runs may be inefficient because the deposit con-tract designed to provide liquidity induces depositors to have excessive incentives to withdraw. An im-provement in transparency of a bank may reduce depositor welfare through increasing the chance of an inefficient contagious bank run on other banks. A deposit insurance system in which some depositors are fully insured and the others are partially insured can ameliorate this inefficiency. Under such a system, bank runs can serve as an efficient mechanism for disciplining banks. We also consider bank managers’ control over the timing of information disclosure, and find that they may lack the incentive to reveal in-formation about their banks. |
| Keywords: | bank run; contagion; transparency; market discipline; deposit insurance |
| JEL: | G21 G28 |
| Date: | 2005–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2005_024&r=ias |