Long-Term Care Insurance : Information Frictions and Selection
Résumé
This paper conducts a stated-choice experiment where respondents are asked to rate various insurance products aimed to protect against nancial risks associated with long-term care needs.
Using exogenous variation in prices from the survey design and individual cost estimates, these stated-choice probabilities are used to predict market equilibrium for long-term care insurance.
Our results are twofold. First, information frictions are pervasive. Second, measuring the welfare losses associated with frictions in a framework that also allows for selection, it is found that information frictions reduce equilibrium take-up and lead to large welfare losses while selection plays little role.
Domaines
Economies et financesOrigine | Fichiers produits par l'(les) auteur(s) |
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