Details

Autor(en) / Beteiligte

• Geruso, Michael
• Layton, Timothy J.
• McCormack, Grace
• Shepard, Mark

Titel

The Two-Margin Problem in Insurance Markets

Ist Teil von

• The review of economics and statistics, 2023-03, Vol.105 (2), p.237-257

Ort / Verlag

One Rogers Street, Cambridge, MA 02142-1209, USA: MIT Press

Erscheinungsjahr

2023

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• Insurance markets often feature consumer sorting along both an extensive margin (whether to buy) and an intensive margin (which plan to buy). We present a new graphical theoretical framework that extends a workhorse model to incorporate both selection margins simultaneously. A key insight from our framework is that policies aimed at addressing one margin of selection often involve an economically meaningful trade-off on the other margin in terms of prices, enrollment, and welfare. Using data from Massachusetts, we illustrate these trade-offs in an empirical sufficient statistics approach that is tightly linked to the graphical framework we develop.